A6.18 Policies or projects which involve long term effects may require a different approach. This can be particularly important for policies expected to have significant environmental effects. Where long term effects are expected to occur, the appraisal of proposals may involve longer timescales. Generally, the maximum life span of an intervention is assumed to be up to 60 years. This may be extended where there is evidence a longer time period is required for the full effects of an intervention to materialise.
A6.19 The standard STPR of 3.5% applied in appraisal should decline over the long term due to uncertainty about future values of its components. The declining rates are shown in Table 8. To support practical application in appraisal, discount factors by year can be found in Table 9 and Table 10 below in addition to the Green Book web-pages. The basis for the approach to long-term discounting set out here can be found in supplementary guidance on intergenerational wealth transfers and social discounting.