Fifteenth CEPR-EAERE Webinar Series on Climate Policy: Economic analysis of the new U.S. discounting system

The 15h Episode of the CEPR/EAERE Webinar Series on Climate Policies took place on Wednesday, 3 April 2024, at 5 PM (CET), 11 AM (ET), and 4 PM (GMT) with David Anthoff (University of California, Berkeley), Marcel Boyer (University of Montréal and CIRANO) and James K. Hammitt (Harvard University and Toulouse School of Economics).

In November 2023, the U.S. OMB has published new versions of Circular A-4 and Circular A-94 that contain in particular a new discounting system for public policy evaluation. The new risk-free discount rate is now fixed at 2% in real term, whereas it is also proposed to use a risk-adjusted discount rate of 3.1%. Compare to the earlier much larger discount rates, this reform is likely to make the American society more long-termist, in particular in the domain of environmental protection and climate change. This webinar offered three critical analyses of the underlying approach which led to the reform, and of its consequences.

The presentations were followed by a discussion and Q&A session with the audience moderated by Christian Gollier (Toulouse School of Economics, EAERE, and CEPR).