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Environmental benefit-cost analysis: a comparative analysis between the United States and the United Kingdom

Author

Listed:
  • Aldy, Joseph E.
  • Atkinson, Giles
  • Kotchen, Matthew J.

Abstract

The United States and United Kingdom have long-standing traditions in the use of environmental benefit-cost analysis (E-BCA). While there are similarities between how EBCA 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 practical 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. & Atkinson, Giles & Kotchen, Matthew J., 2021. "Environmental benefit-cost analysis: a comparative analysis between the United States and the United Kingdom," LSE Research Online Documents on Economics 110879, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:110879
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    File URL: http://eprints.lse.ac.uk/110879/
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    References listed on IDEAS

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    More about this item

    Keywords

    benefit-cost analysis; social cost of carbon; social discount rate; value of statistical life; regulatory impact analysis;
    All these keywords.

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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