Cost-Benefit Analysis and the Problem of Long-term Harms from Environmental Pollution

May 26, 2023

The amended Circular A-4 uses a 1.7% discount rate to avoid undervaluing environmental and public health advantages in cost-benefit evaluations. This reform incorporates 30 years of personal savings returns and a society discounting perspective.

Ethical considerations recommend a lower rate for future generations. Regulations addressing future damages, such as methylene chloride, can be affected by discount rates. The new Circular A-4 advice will improve harmful chemical regulation, especially cancer prevention.

Due of their developmental stage and longer longevity, children under 50 should be the Environmental Protection Agency, (EPA)'s cancer priority. EPA must balance the costs and advantages of addressing dangerous chemical risks under Toxic Substances Control Act, (TSCA). The modified Circular A-4 discount rates will assist EPA quantify prevented cancer cases and analyze the benefits of pollution reduction.


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