I have ignored
reasons that might justify lower discount rates or higher GDP adjustments for China mainly because the purpose of this essay is to explain why the U.S. multiple is so much higher than China's, and of course these
reasons exist, but I think whatever the correct ratio should be, there is no question that advanced economies always justify higher multiples than developing economies because they tend to be economically more diversified and
politically more stable, and they usually have institutions, including clearer legal and regulatory frameworks, more sophisticated capital allocation processes,
less rigid financial systems, and smaller state sectors (which make smooth adjustment, one of the most valuable and undervalued components of long - term growth, more likely).
At the same time, focusing on the multiple compelling
reasons for improving nitrogen and phosphorus management may represent an opportunity to make progress on climate policy in ways that are
less politically divisive.