President Ronald Reagan’s Executive Order 12291 required major U.S. federal regulations to be accompanied by Regulatory Impact Analyses that compared expected benefits and costs. This helped make utilitarian-style decision tools (weighing total social gains and losses) a standard part of U.S. regulatory practice. The approach later shaped how climate and energy rules were evaluated.
President Bill Clinton’s Executive Order 12866 restructured regulatory review and emphasized that agencies should propose or adopt regulations only when benefits justify costs (to the extent permitted by law). This kept benefit–cost analysis central in U.S. rulemaking across administrations. It later provided an institutional home for monetizing climate benefits in regulatory analyses.
The IPCC’s Second Assessment Report concluded that the “balance of evidence” suggested a discernible human influence on global climate. By strengthening the scientific basis for anticipating damages, the report reinforced the policy case for treating climate change as a harm that could be analyzed and compared to mitigation costs. This mattered for cost–benefit reasoning because it supported more formal estimates of climate risks and impacts.
Countries adopted the Kyoto Protocol, creating binding emissions targets for many industrialized nations and intensifying debates about the economic costs of mitigation versus the damages of climate change. These debates pushed governments and researchers to compare policy options using cost–benefit and cost-effectiveness tools. Even where targets were negotiated politically, economic analysis became a common way to argue for or against stronger commitments.
OMB Circular A-4 provided detailed federal guidance on how agencies should conduct regulatory analysis, including discounting, uncertainty, and how to present benefits and costs. This guidance shaped the practical “rules of the road” for U.S. benefit–cost analysis, including climate-related rules. It also influenced how agencies justified assumptions when monetizing long-term environmental harms.
The UK government released the Stern Review, arguing that climate change is a major market failure and that early action’s benefits outweigh costs. A key controversy centered on discounting—how much we reduce the value of future harms and benefits when comparing them to present costs. The debate helped bring ethical assumptions (about valuing future generations) into mainstream climate cost–benefit analysis.
The U.S. Supreme Court held that greenhouse gases are “air pollutants” under the Clean Air Act and that EPA must make an endangerment determination based on the statute. This created a stronger legal pathway for federal climate regulation, increasing the importance of showing (with evidence) that climate rules’ benefits are worth their costs. It also set up later fights over how to value climate benefits in regulatory impact analyses.
EPA finalized its Endangerment and “Cause or Contribute” Findings, concluding that six key greenhouse gases threaten public health and welfare and that motor-vehicle emissions contribute to that pollution. The finding was a prerequisite for major federal greenhouse-gas standards, making the benefits side of climate regulation a central topic for analysis. It also set the stage for wider use of monetized climate benefits in U.S. rulemaking.
A U.S. interagency process was convened to produce consistent federal estimates of the Social Cost of Carbon (SCC), a dollar value for the damages caused by emitting one additional metric ton of CO₂. The SCC operationalized applied utilitarian reasoning by turning dispersed, long-term climate harms into a single comparable metric. It became a key input for comparing climate rule benefits against compliance costs.
The Interagency Working Group released a technical update to the SCC, reflecting updated models and assumptions. This showed how SCC values were intended to evolve with science and economics, not remain fixed. The update further embedded a standardized, monetized climate-benefits approach in U.S. regulatory cost–benefit analysis.
Countries adopted the Paris Agreement, committing to hold warming well below 2°C and pursue efforts toward 1.5°C through nationally determined contributions (NDCs). The agreement’s “ratchet” structure increased demand for tools that compare policy options and justify stronger action over time. Cost–benefit analysis and social-cost metrics became part of how many governments argued for policy packages and assessed ambition.
President Joe Biden’s Executive Order 13990 re-established an interagency process for the social cost of greenhouse gases and directed publication of interim estimates. This renewed an explicitly quantified approach to valuing climate benefits across federal decisions, reinforcing utilitarian-style aggregation of damages and benefits. It also intensified legal and political disputes over scope (global vs. domestic damages) and discounting choices.
President Donald Trump’s Executive Order 14154 directed agencies away from using prior interagency social-cost guidance and criticized the social cost of carbon as an analytical tool. This marked a major shift in how federal cost–benefit analysis treated climate damages, changing the practical role of utilitarian aggregation in regulatory decisions. The move also helped set up new disputes over how agencies should value long-term climate harms under existing regulatory-analysis requirements.
EPA revoked the 2009 Endangerment Finding, removing a central legal foundation for many federal greenhouse-gas regulations under the Clean Air Act. With fewer climate rules moving forward, the main arena for applying monetized climate benefits (including social-cost metrics) in U.S. regulatory cost–benefit analysis narrowed sharply. The action also signaled an endpoint for one influential period in which utilitarian-style climate valuation was tightly linked to federal rulemaking.
Utilitarianism in Climate Policy and Cost–Benefit Analysis (1960–present)