Title Exploration of different metrics for policy evaluation
 Collaborators Hadi Dowlatabadi
 Keywords climate policy, climate change, policy evaluation, market impacts, non-market impacts, ecological footprints, human health
 Abstract

Global environmental policies involve parties from significantly different socio-economic and environmental conditions. The distributional aspects of policy costs and benefits are critical to the identification of mutually acceptable policies. In this research we are developing four different aggregation metrics for costs and benefits of collective action:

  • monetized equivalents of market and non-market impacts (this gives each dollar an equal weight wherever that impact occurs);
  • impacts expressed in terms of labor input required (this gives the labor of each individual equal weight wherever that impact occurs);
  • impacts expressed in terms of ecological footprints (this gives each photon captured by the biosphere an equal weight wherever that impact occurs);
  • impacts expressed in terms of human health outcomes (this expresses outcomes in terms of changes in life-expectancy and hence is tied to the status of public health and risks faced in each region where impacts occur); and,
  • a multi-metric expression of different impacts in their natural units.

We expect the impacts of policy, the level of climate change, and sensitivity to these changes to vary by region. In a cost-benefit framework we hope to aggregate outcomes across the regions to identify collective policies that can offer mutual benefits (assuming a willingness to redistribute resources between the winners and losers afterwards). I will show that the choice and design of the mutually desirable policy is extremely sensitive to the assumed metric of aggregation.