On Not Revisiting Official Discount Rates: Institutional Inertia and the Social Cost of Carbon

8 Pages Posted: 23 Oct 2013

See all articles by Cass R. Sunstein

Cass R. Sunstein

Harvard Law School; Harvard University - Harvard Kennedy School (HKS)

Date Written: October 21, 2013

Abstract

Within the federal government, official decisions are a product of both substantive judgments and institutional constraints. With respect to discounting, current practice is governed by OMB Circular A-4 and the 2010 and 2013 technical support documents of the Interagency Working Group on the Social Cost of Carbon. Reconsideration of existing judgments must be subjected to a demanding and time-consuming process of internal review (and potentially to external review as well). Institutional constraints, including the need to obtain consensus, can impose obstacles to efforts to rethink existing practices, especially in an area like discounting, which is at once technical and highly controversial.

Keywords: discount rates, cost-benefit analysis, inertia, social cost of carbon

Suggested Citation

Sunstein, Cass R., On Not Revisiting Official Discount Rates: Institutional Inertia and the Social Cost of Carbon (October 21, 2013). American Economic Review: Papers and Proceedings, 2014, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2343379

Cass R. Sunstein (Contact Author)

Harvard Law School ( email )

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Cambridge, MA 02138
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Harvard University - Harvard Kennedy School (HKS) ( email )

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Cambridge, MA 02138
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