How does one asses the impact of a proposed policy?

Question

My State government is considering a new regulatory policy at the moment. We need to put together an assessment of the (likely) economic impacts of the policy. How do we do that?

• I don't work for the state, I'm an outside volunteer.
• I don't have any specific economics education.
• I'm hoping to be able to put something meaningful together with just a couple of evenings of work.
• There are a few other people whom I'm hoping will help.
• At this point even knowing what to google could be a big step forward

The desired end result, I'm pretty sure, is a document saying "Given this trusted data, and these reasonable starting assumptions, and this comprehensible mathematical model, we expect to see about this many more or fewer jobs and about this much more or less business investment". Not knowing any standardized techniques, this feels like trying to forecast the effects of a river dam on next year's hurricanes.

There are a few components to the proposed rules, but they can be considered in isolation. The most important one would require (of large producers) a set rate of reduction of CO₂ emissions, which currently have few if any regulations in our state. So, for example, opponents of the rules will want a forecast based on the assumption that activities which are currently emitting CO₂ simply shut down instead of migrating to different technology; proponents will want a forecast based on the assumption that wind an solar installations ramp up perfectly.

I'm new here; feel free to edit the tags or question!

Answer 1

Being an economist, I'd say that carrying out a quantitative forecast ("the policy will create/cost x jobs") would require setting up a model, feeding appropriate data and applying appropriate estimations. You would require decent data on the firm level and a detailed model dealing with lots of production factors. In other words, lots of work and probably way beyond your team's resources. What might be feasible is to do a research on the relevant scientific literature in that realm. In particular, you should look for theoretical work on the expected qualitative effects from such a policy. Second, you may look for empirical studies on comparable policies in other countries and contexts. This might give you a rough picture of what one can expect. Assessing the external empirical results might be hard if you're not an expert in the field, but the following guidelines might be of help:

• Prefer authors from academic institutions over e.g. international organizations or (way worse) lobby groups.
• Prefer peer-reviewed publications to non peer-reviewed publications. Use Google Scholar as search engine. For any research item, click on "all versions". If the item is published in some scientific journal (say, Journal of Environmental Economics), this might give you an indication for quality.
• prefer more recent studies and studies that deal with countries similiar to yours over others.