Should Benefit–Cost Methods Take Account of High Unemployment? Symposium Introduction

V. Smith

Review of Environmental Economics and Policy, 2015, vol. 9, issue 2, 165-178

Abstract: Conventional methods in benefit–cost analysis maintain that the effects of new environmental regulations should focus on long run equilibria with and without the policies being evaluated. This article introduces a symposium that considers how the employment effects of environmental regulations might be included in benefit–cost analyses. Three lessons emerge from the symposium. First, the empirical evidence to date indicates that it is difficult to measure the net employment effects of environmental regulations. The record is mixed, with support for effects at the plant level. The record is less clear for the reduced form estimates using more aggregate data. Second, it is possible to construct an ex post "analysis chain" that allows for estimation of the adjustment costs associated with a job loss. These estimates depend importantly on the assumptions made in the construction of the counterfactual baseline employment history and the outcomes after job losses. The ways in which households might adapt to a job loss are especially important for measuring adjustment costs. Finally, economy-wide evaluations of the impact of environmental regulations require a new framework to characterize the role of regulations and the associated changes in environmental quality for steady state responses to policy.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://hdl.handle.net/10.1093/reep/rev007 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:renvpo:v:9:y:2015:i:2:p:165-178.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Review of Environmental Economics and Policy is currently edited by Robert Stavins

More articles in Review of Environmental Economics and Policy from Association of Environmental and Resource Economists Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().