Environmental Benefit-Cost Analysis: A Comparative Analysis Between the United States and the United Kingdom

28 Pages Posted: 12 Mar 2021

See all articles by Joseph E. Aldy

Joseph E. Aldy

Harvard Kennedy School; National Bureau of Economic Research; Resources for the Future; Harvard University - Harvard Kennedy School (HKS)

Giles Atkinson

London School of Economics and Political Science (LSE) - Department of Geography and Environment

Matthew Kotchen

Yale University

Multiple version iconThere are 2 versions of this paper

Date Written: March 11, 2021

Abstract

The United States and United Kingdom have longstanding traditions in use of environmental benefit-cost analysis (E-BCA). While there are similarities between how E-BCA is utilized, there are significant differences too, many of which mirror ongoing debates and recent developments in the literature on environmental and natural resource economics. We review the use of E-BCA in both countries across three themes: (a) the role of long-term discounting; (b) the estimation and use of carbon valuation; and, (c) the estimation and use of the value of a statistical life. In each case, we discuss how academic developments are (and are not) translated into use and draw comparative lessons. We find that, in some cases, practical differences in E-BCA can be overstated, although in others these seem more substantive. Advances in the academic frontier also raise the question of when and how to update practical E-BCA, with very different answers across our themes.

Suggested Citation

Aldy, Joseph E. and Atkinson, Giles and Kotchen, Matthew, Environmental Benefit-Cost Analysis: A Comparative Analysis Between the United States and the United Kingdom (March 11, 2021). HKS Working Paper No. RWP21-008, Available at SSRN: https://ssrn.com/abstract=3802792 or http://dx.doi.org/10.2139/ssrn.3802792

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Giles Atkinson

London School of Economics and Political Science (LSE) - Department of Geography and Environment ( email )

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Matthew Kotchen

Yale University ( email )

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