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Guidelines for Preparing Economic Analyses

Cover graphic for Guidelines ReportWhat are the Guidelines?
Why are the Guidelines important?
What topics are covered in the Guidelines?
Who are the Guidelines for?
How were the Guidelines produced?
How will future updates to the Guidelines be incorporated?
What’s New in 2014?
Download a copy of the Guidelines.
For further information on the Guidelines.

What are the Guidelines?

EPA's Guidelines for Preparing Economic Analyses establish a sound scientific framework for performing economic analyses of environmental regulations and policies. They incorporate recent advances in theoretical and applied work in the field of environmental economics. The Guidelines provide guidance on analyzing the benefits, costs, and economic impacts of regulations and policies, including assessing the distribution of costs and benefits among various segments of the population.

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Why are the Guidelines important?

The Guidelines serve several important functions: (1) they assist policy makers in developing regulations that achieve the highest environmental quality and human health standards at the lowest costs; (2) provide analysts with information needed to prepare high quality economic analyses; (3) develop an overarching framework for economic analyses throughout the Agency and across EPA Program Offices; and (4) ensure that important subjects such as uncertainty, timing, and valuation of costs and benefits, are treated consistently in all economic analyses at EPA. EPA will use the Guidelines to evaluate the economic consequences of its regulations and policies to insure that they contribute to a safe environment and a healthy economy.

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What topics are covered in the Guidelines?

The Guidelines address major analytical issues on key topics, including:


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Who are the Guidelines for?

The main audiences for the Guidelines are those performing or using economic analysis, including policy makers, the Agency's Program and Regional Offices, and contractors providing economic reports to the EPA. However, the Guidelines may also be useful for those teaching courses on benefit cost analysis or environmental economics.

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How were the Guidelines Produced?

Development of the Guidelines was led by the EPA's National Center for Environmental Economics (NCEE) in consultation with economists from across the Agency. The Guidelines were subject to peer review by the Environmental Economics Advisory Committee of EPA's Science Advisory Board. The committee, comprising leading environmental economists from major universities and research institutions, assessed the Guidelines for accuracy in both economic theory and practice. In their final report to EPA Administrator Lisa Jackson, the Science Advisory Board offered specific recommendations for improvement, but noted that "...the Guidelines significantly elevate the quality and transparency of the information upon which environmental decisions are made." The final Guidelines were revised in response to the comments of the Science Advisory Board.

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How will future updates to the Guidelines be incorporated?

EPA intends to revise and update these Guidelines periodically to capture new literature and the best available science. As new chapters are developed or existing chapters revised, they will be made available for download on this website once they pass external peer review. Each chapter will contain a date stamp indicating its "publication" date.

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What’s New in 2014?

EPA expanded its Guidelines with the addition of a new chapter:

Chapter 10: Environmental Justice, Children’s Environmental Health and Other Distributional Considerations

Specifically, the chapter discusses how to consider environmental justice, children's environmental health and other factors in economic analyses conducted for economically significant rules. Developed to assist EPA economists, the chapter provides an overview of Executive Orders, policies, and other directives that discuss how benefits and impacts of a regulatory action may be distributed across various groups, summarizes relevant economic literature, defines key population groups, offers a suite of methods that can be used to describe distributional effects, and presents emerging issues related to the use of inequality indices.

With the addition of this chapter, EPA has also updated the Front Matter, References, Author Index and Subject Index (Appendices D-F) accordingly.

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Download a copy of the Guidelines.

The Guidelines are available for download in a single PDF file (PDF, 5,785 K, About PDF). Individual chapters are also available:

TitleFile Size (kb)Updated
Cover362December 2010
Front Matter465May 2014
Chapter 1: Introduction180December 2010
Chapter 2: Statutory and Executive Order Requirements for Conducting Economic Analyses126December 2010
Chapter 3: Statement of Need for Policy Action90December 2010
Chapter 4: Regulatory and Non-Regulatory Approaches to Pollution Control252December 2010
Chapter 5: Baseline180December 2010
Chapter 6: Discounting Future Benefits and Costs437December 2010
Chapter 7: Analyzing Benefits406December 2010
Chapter 8: Analyzing Costs271December 2010
Chapter 9: Economic Impact Analysis243December 2010
Chapter 10: Environmental Justice, Children's Environmental Health, and Other Distributional Considerations549May 2014
Chapter 11: Presentation of Analysis and Results180December 2010
Appendix A: Economic Theory314December 2010
Appendix B: Mortality Risk Valuation Estimates136December 2010
Appendix C: Accounting for Unemployed Labor in Benefit-Cost Analysis60December 2010
Appendices D - F: References, Author Index, and Subject Index1,108May 2014

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For further information on the Guidelines.

Nathalie Simon (Guidelines Project Leader and Associate Director, NCEE): 202-566-2347, Simon.nathalie@epa.gov
Al McGartland (NCEE, Director): 202-566-2244
Office fax number: 202-566-2363

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