In the first Superman movie, released in 1978, Lex Luthor, the supervillain played by Gene Hackman, buys up large swaths of real estate in the deserts of eastern California and Nevada. His plan is to hijack a nuclear missile and use it to cleave off coastal California into the Pacific Ocean, leaving him with newly valuable beach-front property. Well, maybe all Lex really needed was patience, not a nuclear device.

One new report estimates that – on the current path – perhaps $500 billion of U.S. coastal properties will be below sea level by 2100. (Of course, as Luthor would surely tell us, the disappearance of the current coastline would raise the value of property that is currently inland. But that’s beside the point.) We have plenty of other longer-run worries, too; like surviving a future asteroid hit (an event like the Tunguska blast of 1908 – perhaps 1,000 times more powerful than the Hiroshima bomb – probably occurs every 1,200 years) or managing radioactive waste (which can be toxic for tens of thousands or even millions of years).

How much should we care about such big threats that are potentially far off in time? How much ought we spend now to avoid a $1 worth of damage hundreds of years in the future?

This is a complex and controversial question. The answer depends on a variety of factors, including the relative affluence of our descendants and the degree of uncertainty about the future. If our descendants, the future population of earth, will be far richer than we are, perhaps they should bear a larger part of the adjustment burden. However, postponing investments in public safety may not be desirable – or even possible – if the future threat is cataclysmic (think of the dinosaurs who disappeared 66 million years ago!). Campaigning for more spending on space exploration now, physicist Stephen Hawking has argued that human beings “won’t survive another 1,000 years without escaping our fragile planet.”

To simplify the question, imagine that the only thing we care about is the present value of the losses associated with a preventable future disaster. The chart below shows the present value of a $1 of loss occurring at time t at various discount rates. For example, at a discount rate of 2% (the blue line), $1 of loss in 100 years would be equivalent to a loss of $0.13 today. For comparison, if the discount rate were 4% (the black line), the present value of the loss would be less than $0.02. Or, if the discount rate were only 1% (the red line), the present value would be $0.37.

Present Value of $1 At Time t Using Selected Discount Rates