(Washington, D.C. – November 9. 2023) The Biden administration today announced its modernization of key guidelines that inform how our nation responds to serious threats like health-harming environmental contaminants and climate-destabilizing pollution.
The White House Office of Information and Regulatory Affairs (OIRA) unveiled the updated Circular A-4, which governs analyses of the benefits and costs of federal regulatory safeguards. The White House also released an updated version of Circular A-94, which provides guidance on benefit and cost analyses in the context of federal investments.
“Today’s action will help ensure that our nation relies on rigorous information when addressing serious threats to the American people, like toxins that harm our children’s health and climate pollution,” said Rosalie Winn, Director of Methane and Clean Air Policy for Environmental Defense Fund. “The modernized Circular A-4 will put appropriate emphasis on impacts to future generations, give greater consideration to how different groups will be affected by regulatory safeguards, and offer better guidance on how to quantify harms like health effects. Relying on the most up-to-date information will help us address modern challenges like the climate crisis. Today’s updates will also support building resilience to climate impacts into federal decision-making.”
The modernized Circular A-4 uses a default discount rate of two percent, a shift from the higher discount rates that the U.S. has used until now and which economic studies have shown to be flawed. The two percent discount rate is based on rigorous, data-driven analyses that have been through independent peer review.
The shift to a lower discount rate will help ensure policymakers do not devalue the impacts and threats to future generations, which is particularly important when considering problems like climate change.
Today’s updates also include guidance on distributional analysis and equity weighting, which is critical for understanding how different groups are impacted in distinct ways by federal actions. These updates are rooted in decades of rigorous analysis and can help advance equity and justice in federal decisions.
The updated Circular A-4 also:
- Includes improved guidance on consideration of transboundary impacts, which is critical for evaluating global problems – including climate change
- Includes greater consideration of distributional impacts
- Includes improved guidance on the monetization of impacts and consideration of unquantified impacts, like many health effects
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