Integrating Equity into Benefit-Cost Analysis: Theory and Practice

Harvard University, Cambridge MA

Investigators

Abstract

Environmental policy decisions are often evaluated either on their impacts on high-risk communities or on the magnitudes of their net societal benefits, but both elements are rarely considered in the same analysis. This makes it difficult to inform policy decisions when there may be tradeoffs between equity and efficiency. This project focuses on synthesizing concepts and methods across two disciplines often at odds with one another - environmental equity analysis and risk-based benefits assessment - to better inform choices among alternative environmental policies. To address these issues, this project will both develop quantitative measures of environmental equity suitable for air pollution benefits assessment and refine the benefits assessment methodology to better account for heterogeneity in exposure patterns and susceptibility to disease. The appropriateness of these methods will be evaluated using specified criteria, through stakeholder feedback, and through two case studies. The first case study will examine alternative proposals to control emissions from power plants, a policy decision where much debate has centered on distributional issues and where impacts are found on a national scale. The second case study will consider control strategies for mobile source emissions, with both national and local analyses to inform decision making at multiple levels. Considering both ground-level emissions in urban settings and emissions from elevated point sources will allow for issues of geographic scope and resolution to be addressed in detail, a topic that has posed difficulties in both environmental equity analysis and benefits assessment. More generally, these case studies will advance the analytical techniques used in both environmental equity analysis and air pollution benefits assessment, while answering timely policy questions and providing educational materials for classroom and community settings.