2016 Conference - Session 8

Session 8 - Friday, March 18, 3:45 - 5:15pm

A.8: Opportunities and Challenges for Benefit-Cost Analysis in the Paris Climate Agreement (Roundtable Discussion)

Chair: Elisabeth Gilmore, University of Maryland

Panelists:

1. Allen Fawcett, US Environmental Protection Agency

2. James Neumann, Industrial Economics, Incorporated

3. Jonathan Wiener, Duke University

4. Gary Yohe, Wesleyan University

Benefit-cost and economic analysis has the potential to play an important role in supporting the Paris climate agreement. In this roundtable, we will discuss the opportunities and challenges for BCA and economic analysis for both the mitigation and adaptation dimensions of the agreement as well as specific provisions, such as evaluating the benefits and costs of achieving a “well below 2C target”, reviewing the level of ambition in the Intended Nationally Determined Contributions (INDCs), supporting adaptation at the project level as well as the allocation of climate finance, plus regulatory and other legal issues. Cross cutting issues include accounting for the costs and especially the benefits, verification and monitoring of mitigation and adaptation efforts, new modeling needs and capacity building, as well as the scope and limitations of BCA for climate change policy.

B.8: Role of BCA in Government Decisions (Roundtable Discussion with Agency Chief Economists)

Chair: Stuart Shapiro, Rutgers University

Panelists:

1. Timothy Brennan, UMBC and Resources for the Future

2. Randall Lutter, University of Virginia

3. Robert Johansson, USDA

4. Al McGartland, US Environmental Protection Agency

5. Rose Odom, US Coast Guard

6. Jack Wells, US Department of Transportation (former)

C.8: Teaching Benefit-Cost Analysis (Roundtable  Discussion)

Chair: Peter Linquiti, The George Washington University

Panelists to include:

1.  Joseph Cordes, The George Washington University

2.  Don Kenkel, Cornell University

3.  Glenn Blomquist, University of Kentucky.

D.8: Benefit-Cost Analysis of Development Projects: Recent Experience at the Millennium Challenge Corporation (with a USAID application)

Chair: Craig Thornton, Mathematica Policy Research

The Millennium Challenge Corporation (MCC) is an independent U.S. foreign assistance agency that is helping lead the fight against global poverty. Since its creation in 2004, it has made over $11 billion in grants to some of the world’s poorest nations that have committed themselves to good governance, economic freedom and investments in their citizens. Benefit-cost analysis has proven to be a useful tool for assessing the value of the activities covered by past grants and for planning future grants. This session illustrates the use of benefit-cost analysis and highlights some of the challenges faced by analysts investigating the returns from development programs.

Presentations:

1.     Economic Rates of Return at MCC – a Summary of Results, Sandra Ospina,* Millennium Challenge Corporation

This paper reviews how MCC does Cost Benefit Analyses and summarizes the full set of MCC’s analyses of the economic rate of return generated by completed grants.

2.     Benefit Cost Analysis of the BRIGHT Program in Burkina Faso, Ali Protik,* Mathematica Policy Research

The BRIGHT program was designed to improve the educational outcomes of children in Burkina Faso. The benefit-cost study draws on a rigorous evaluation of program impacts using data from almost 300 villages. The results show that the net value of the investments depends crucially on the returns to education.

3.     Benefit Cost Comparisons of Road Maintenance and Reconstruction Strategies – A Dollar in Time Saves Nine, Andrew Carter* and Sarah Olmstead,* Millennium Challenge Corporation

This paper employs the World Bank’s widely-used HDM-4 model of road pavement conditions and their effects on vehicle operating costs to simulate the potential benefits of improvements in road maintenance regimes relative to MCC’s early practice of reconstructing host country nominated roads. This approach has important implications for policy making given the substantial investments being made in roads and transportation.

4.     USAID’s Assessment of Food Security Risks Within a Benefit Cost Framework, Sarah Lane,* Millennium Challenge Corporation, and Jerrod Mason,* USAID

This paper looks at techniques to expand risk analysis to incorporate intertemporal variation in key indicators and adverse shocks to the system.  It will draw on examples in both agriculture and infrastructure investments.