Publications by Author: Aldy, Joseph

Aldy, Joseph, Matthew Kotchen, Mary Evans, Meredith Fowlie, Arik Levinson, and Karen Palmer. “Co-Benefits and Regulatory Impact Analysis: Theory and Evidence from Federal Air Quality Regulations.” Discussion Paper (2021): 45.Abstract
This paper considers the treatment of co-benefits in benefit-cost analysis of federal air quality regulations. Using a comprehensive data set on all major Clean Air Act rules issued by the Environmental Protection Agency over the period 1997-2019, we show that (1) co-benefits make up a significant share of the monetized benefits; (2) among the categories of co-benefits, those associated with reductions in fine particulate matter are the most significant; and (3) co-benefits have been pivotal to the quantified net benefit calculation in nearly half of cases. Motivated by these trends, we develop a simple conceptual framework that illustrates a critical point: co-benefits are simply a semantic category of benefits that should be included in benefit-cost analyses. We also address common concerns about whether the inclusion of co-benefits is problematic because of alternative regulatory approaches that may be more cost-effective and the possibility for double counting.
Evans, Mary, Karen Palmer, Joseph Aldy, Meredith Fowlie, Matthew Kotchen, and Arik Levinson. “The Role of Retrospective Analysis in an Era of Deregulation: Lessons from the U.S. Mercury Air Toxic Standards.” Harvard Environmental Economics Program, 2021.Abstract
As of late 2020, the Trump administration had initiated almost one hundred rollbacks of U.S. environmental regulations. A careful assessment of the benefits and costs of rolling back an existing regulation can and should inform such decisions. When assessing the potential rollback of an existing regulation, analysts can often learn from the regulation’s implementation through retrospective analysis as well as from advances in scientific knowledge. We discuss recent actions concerning the Mercury and Air Toxics Standards (MATS) to illustrate the potential lessons from doing so. In the case of MATS, advances in science have shed light on broader exposure pathways and previously unquantified health effects, suggesting that the benefits of reducing mercury emissions may exceed previous estimates. At the same time, changes in the energy sector have altered the mix of fuels used to produce electricity, which impacts both the benefits and costs of the regulation.