Co-Benefits and Regulatory Impact Analysis: Theory and Evidence from Federal Air Quality Regulations

Karen Palmer, Joseph E. Aldy, Matthew Kotchen, Mary Evans, Meredith Fowlie and Arik Levinson (arik.levinson@georgetown.edu)
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Karen Palmer: Resources for the Future
Joseph E. Aldy: Resources for the Future
Authors registered in the RePEc Author Service: Margaret Walls

No 20-12, RFF Working Paper Series from Resources for the Future

Abstract: This paper considers the treatment of co-benefits in benefit-cost analysis of federal air quality regulations. Using a comprehensive dataset on all economically significant Clean Air Act rules issued by the EPA over the period 1997-2019, we show that (1) co-benefits make up a significant share of the monetized benefits; (2) among the categories of co-benefits, those associated with reductions in fine PM are the most significant; and (3) co-benefits have been pivotal to the quantified net benefit calculation in nearly half of cases. Motivated by these trends, we develop a simple conceptual framework that illustrates a critical point: co-benefits are simply a semantic category of benefits that should be included in benefit-cost analyses. We also address common concerns about whether the inclusion of co-benefits is problematic because of alternative regulatory approaches that may be more cost-effective and the possibility for double counting.

Date: 2020-08-03
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https://www.rff.org/documents/2561/RFF_WP_20-12_Aldy_et_al19599.pdf (application/pdf)

Related works:
Journal Article: Cobenefits and Regulatory Impact Analysis: Theory and Evidence from Federal Air Quality Regulations (2021)
Chapter: Cobenefits and Regulatory Impact Analysis: Theory and Evidence from Federal Air Quality Regulations (2020)
Working Paper: Co-Benefits and Regulatory Impact Analysis: Theory and Evidence from Federal Air Quality Regulations (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:rff:dpaper:dp-20-12

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