The Right Discount Rate for Regulatory Costs and Benefits - James Stock

March 4, 2021, Opinion: "Suppose that regulation of greenhouse gas emissions from power plants would produce large benefits in 30 years—but only modest benefits today. Suppose at the same time that these same regulations require businesses to make a series of increasingly costly changes to their operations over the next several decades. Since 1981, both Republican and Democratic presidents have required government agencies to calculate the cost and benefits of proposed regulations and to proceed only if the benefits justify the costs. To the surprise of many observers, President Joe Biden recently embraced those requirements, which means that cost-benefit analysis is likely to play a central role in his presidency."