Environmental Economics

Background Description of Benefit-cost Guidelines for Regulatory Impact Analysis

Document provides the University of Wyoming Department of Economics' underlying rationale and definitions for doing benefit-cost analysis on environmental regulations within the boundaries of Executive Order 12291. It contains a brief description of most of the central issues on the application of benefit-cost analysis to the relatively unique set of issues that permeates maintenance and preservation of the natural environment. The first is that no well defined group typically benefits from environmental regulation. The benefits often diffuse and spread across society inclusive of future generations. And typically, these benefits are not bought and sold in the marketplace. A second central issue is the physical-biological uncertainties in predicting the health and other beneficial effects of environmental regulations. Typically, there are substantial uncertainties of predicting the effect of a toxic substance on the entire human population from limited actual exposure of animal laboratory experiments. Finally many environmental regulations involve benefits to future generations which causes additional uncertainties as to what future preference are, the extent of discounting future benefits, and the length of time into the future to evaluate benefits and costs.

No precise answers are given to these central issues. Rather, they are discussed and alternatives offered to solve them under various circumstances and given environmental issues.

  • Keywords

    2. Cost-Benefit and Cost Effectiveness Analysis
    2. Cost-Benefit and Cost Effectiveness Analysis - Methodology
    Environmental Media:
    f. Multimedia
    EPA Project Officer/ Manager:
    Carlin, Alan
    Geographic Area:
    Study Purpose:
    Methodology Guidelines
    Inventory Record #: EE-0558
  • Participating Organizations

    Research Organization:

    Wyoming, University of, Department of EconomicsAddress:
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