Discussion Paper

Economic Analysis and the Formulation of U.S. Climate Policy

Dec 31, 2003 | Michael A. Toman

Abstract

Economic analysts within government agencies as well as outside government has played a noticeable and increasing role in formulating U.S. climate policy. However, that role has remained limited; in particular, economic analysis has largely been ignored and occasionally even derided in the context of setting targets for GHG control. This paper explores this uneasy relationship between analysis and policy during several U.S. administrations. Some of these problems stem from the incompleteness of the economic analyses themselves, and economic analysts sometimes have not been the most effective advocates for their own findings. However, I think one of the biggest obstacles to more effective use of economic analysis in climate policymaking has been a basic lack of desire among many policymakers for the fruits of the analyses. This reluctance has been especially marked when the economic analysis clashes with strongly held preconceptions – from either side – about what climate policy ought to be.