پیامدهای زیست محیطی اصلاح امنیت اجتماعی: دومین تهدید برای حفاظت عمومی

The work postulates that investments in environmental stewardship function as an informal intergenerational contract in the current social security system. An immediate pension system reform that orders a transition from a pay-as-you-go system to a ‘what you save is what you get’ system can erode incentives to maintain environmental conservation efforts. If environmental conservation is highly productive in the long run, pension reform could (1) damage every generation through time, (2) place perhaps a modest but unnecessary drag on economic performance or, at the other extreme, (3) destabilize the ecological system entirely by destroying a highly prized environmental resource critical to future welfare. Several reform amendments are presented, but one may be especially attractive. By formalizing an intergenerational annuity to reward a generation directly for its public conservation investments through the existing pension structure, inefficiencies can be eliminated, up front sacrifices can be reduced and reforms can employ the existing social security apparatus to collect payroll taxes and to disburse pension benefits to implement the amended intergenerational contract.

The well-being of future generations motivates numerous public policies. Education reform, health care access, research and development policy, pension reform and of course environmental protection all affect future generations. What is not always obvious is that the policies may be interrelated. This work treats a possible conflict between public pension reforms that seek to reduce the reliance on transfer payments to finance retirement and other public commitments to finance education, research and development and the environment. If poorly coordinated, policies to make pension savings more efficient can exacerbate an existing undersupply of productive public services and may harm the future. One policy alternative is to reward pensioners better for previous public investments and remove any sectoral bias in savings. The link between pension reform and other sustainability objectives gravitates around an imbalance in the way markets reward private investments versus the way public pensions reward public investments. Assets accumulated during working life return the marginal value product of assets saved; yet productive public investments only return directly the taxable share of economic gains through future social security taxes. This means that investors receive from public pensions only a percentage of the marginal value product of the public investments they make. This work extends an observation by Nerlove et al. (1988) that negative bequests inside the household defined as transfers from the working young to their parents motivate previous child-rearing efforts beyond paternalism—or ‘endowments’ to the future are often self-motivated at the margin. I treat the social security system as a society-wide contract between overlapped generations with powerful built-in negative bequests—a promise of elderly care tomorrow that helps to motivate conservation of productive publicly managed resources today. Alarmingly, many proposals to make pension savings more efficient disrupt this contract and install no new mechanisms to fill shortfalls in education or environmental stewardship that may occur. Among the public assets threatened, the environment is particularly vulnerable as nonconvex resource renewal exposes the economy to catastrophic diminution of highly productive natural resources. If society inaugurates pension reform but fails to integrate it competently with choices to finance productive public sector investments, some efficient opportunity is foregone through time, and the consequences of this oversight could be quite severe.

Current social security reforms seek to remove negative bequests that subsidize an existing generation at the expense of future generations. Reformers hope to replace the system with one that rewards savings and investment directly via private capital markets (even if administered by a public investment manager). This disrupts incentives for citizens to support environmental stewardship if conservation increases future wages and thereby increases social security benefits drawn from those wages. The goal of this work is to establish a prima facie case that an existing dual distortion in private pension savings and in public investment and environmental protection can create a condition where social security reform could injure the future in the very effort to help it. In short, we do not know the extent of exposure, so caution suggests that this second best challenge warrants review of pension reform to take account of any injurious reaction that could strain already inefficient public sustainability efforts. The suggested scheme formally targets or approximates a “what you save is what you get” objective, and it allows policy makers to retrofit the existing social security program to accommodate various social choice objectives without sacrificing efficiency or introducing a dramatic shift in pension arrangements. Social security, so conceived, can treat the contract between generations as true retirement income insurance. Several alternative reforms are discussed, and one may be especially attractive. An efficient annuity can amend the existing public pension system to allow it to perform its intergenerational mandate more efficiently, to improve long run welfare and wealth accumulation and to mitigate the up front sacrifices of reform. By tagging social security benefits to the actual or expected returns from prior public investments made by pensioners during working life, long run public investments that benefit the future will be on an equal footing with private investments. A latent benefit of this approach to efficient pension reform is the stabilizing influence that the amendment has on complex environmental systems in which public conservation efforts may react to the shifting incentives embedded in various pension structures. The reform amendment posed is much less painful than many of the more aggressive reforms currently under public scrutiny because the option eradicates an existing inefficiency in public investment and conservation rather than aggravates it further through the reform process. There will emerge more policy alternatives, but the call to attend to the potential relationship between the sustainability initiatives of environmental protection and pension reform appears risky to dismiss.