Reforming Regulatory and Spending Analysis: Introduction to a Symposium on Revising Benefit–Cost Guidance

Benefit–cost analysis plays a key role in regulatory activity in most countries around the world. In the United States, the Office of Management and Budget’s Circular A-4 provides crucial guidance to US federal agencies on how to undertake a regulatory analysis, and Circular A-94 provides similar guidance on federal spending. These key documents have profound impacts on agency decisions on environmental rulemaking and spending on environment-related programs. In November 2023, these crucial documents were very substantially revised, bringing to the forefront important conceptual questions about the discount rate, how distributional effects are incorporated, the valuation of mortality risk, and how ecosystem and environmental services are included in benefit–cost analysis. While the revisions have subsequently been rescinded, this symposium contributes to longstanding debates by delving deeply into the economic issues inherent in the guidance, presenting reflections on the intellectual foundations of several of the most important topics.