How Updated Climate-Damage Values and Discount Rates Will Affect Regulatory Analysis
Recently completed and draft guidance is ushering in updated practices for federal benefit-cost analysis. This policy brief examines the impact of two of the most significant upcoming changes: to the discount rate and the social cost of greenhouse gases.
How Cost-Benefit Analysis Can Promote Equity and Advance Environmental Justice
To achieve the Biden administration’s ambitious commitments to equity and environmental justice, agencies will need guidance on how to assess and weigh the distributional effects of policy options. This report recommends steps that the Office of Management and Budget (OMB) can take to mainstream equity into agencies’ decisionmaking.
Recalibrating the Discount Rate for the Social Cost of Greenhouse Gases (Working Paper)
In light of recent evidence, a new range of discount rates appropriate for calculating the social cost of greenhouse gases could be conservatively estimated as between 0.5%-2.5%, with a central estimate of 1.5%. Agencies should follow the Interagency Working Group’s guidance on applying new social cost of greenhouse gas estimates based on updated discount rates—and will need to justify their choices, including any departures from prior practices.
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