The ethics of intergenerational risk Abstract   This paper addresses the evaluation of intergenerational allocations in an uncertain world. It axiomatically characterizes a class of criteria, named referencedependent utilitarian, that assess allocations relative to a stochastic reference. The characterized criteria combine social concerns for exante equityxe2x80x94capturing the idea that generations should be treated equitably before risk is resolvedxe2x80x94and for expost fairnessxe2x80x94capturing the idea that generations should be treated equitably after risk is resolved. Social discounting is endogenous and is governed by two opposite forces: extinction risk pushes society to reduce the weight on future generations, while (uninsurable) technological risk pushes society to increase the weight on future generations.

Fundamental Utilitarianism and Intergenerational Equity with Extinction Discounting Ramsey famously condemned discounting xe2x80x9cfuture enjoymentsxe2x80x9d as xe2x80x9cethically indefensiblexe2x80x9d. Suppes enunciated an equity criterion which, when social choice is utilitarian, implies giving equal weight to all individualsxe2x80x99 utilities. By contrast, Arrow (Contemporary economic issues. International Economic Association Series. Palgrave Macmillan, London, 1999a; Discounting and Intergenerational Effects, Resources for the Future Press, Washington DC, 1999b) accepted, perhaps reluctantly, what he called Koopmansxe2x80x99 (Econometrica 28(2):287xe2x80x93309, 1960) xe2x80x9cstrong argumentxe2x80x9d implying that no equitable preference ordering exists for a sufficiently unrestricted domain of infinite utility streams. Here we derive an equitable utilitarian objective for a finite population based on a version of the Vickreyxe2x80x93Harsanyi original position, where there is an equal probability of becoming each person. For a potentially infinite population facing an exogenous stochastic process of extinction, an equitable extinction biased original position requires equal conditional probabilities, given that the individualxe2x80x99s generation survives the extinction process. Such a position is welldefined if and only if survival probabilities decline fast enough for the expected total number of individuals who can ever live to be finite. Then, provided that each individualxe2x80x99s utility is bounded both above and below, maximizing expected xe2x80x9cextinction discountedxe2x80x9d total utilityxe2x80x94as advocated, inter alia, by the Stern Review on climate changexe2x80x94provides a coherent and dynamically consistent equitable objective, even when the population size of each generation can be chosen.