EPA's Partial Retreat on Cost-Benefit Analysis
In a memo sent last week but just now released, EPA Administrator Andrew Wheeler backtracked a bit on one of the administration's initiatives to undercut sensible safeguards. His May 13 memo abandons the agency's push last year to establish uniform standards for bending agency decision making in favor of cost-benefit analysis, regardless of statutory directives, and instead directs that this effort follow a statute-by-statute approach.
Wheeler’s retreat on this particular effort to ignore the life-saving benefits of environmental rules is good news. He acceded to the concerns raised by CPR and other legal experts that the Clean Air Act, Clean Water Act, and various other environmental laws impose different requirements, making a one-size-fits-all approach to cost-benefit analysis both impractical and unlikely to survive legal challenge. But as with everything this administration does when it comes to health, safety, and the environment, when Wheeler talks about improving the process, the real objective is to allow more pollution in our air and water, favoring industry profit over public health.
More on this later...
Originally published on Legal Planet.
Cost-benefit analysis has long been the target of environmentalist ire. But one lesson of the Trump years has been that economic analysis can be a source of support for environmental policy — it is the anti-regulatory forces who have to fudge the numbers to justify their actions. Most energy and environmental economists are aghast at Trump's assaults on climate change regulations — many of them would instead favor stricter regulation over the status quo. Maybe it's time for at least a temporary ceasefire while we are allies in resisting Trump's rollbacks.
There is little doubt that the Reagan administration adopted cost-benefit analysis as a tool for reaching its own preferred deregulatory outcomes. The Office of Information and Regulatory Affairs (OIRA) was put in charge of cost-benefit analysis with the expectation that it would be a death trap for regulations. OIRA seemed happy to oblige …
Today, the Center for Progressive Reform and 46 other environmental, labor, and public health organizations sent a letter to Environmental Protection Agency (EPA) Administrator Andrew Wheeler calling on him to withdraw the agency's pending "benefits-busting" rule. Wheeler was recently confirmed as the official agency head, and, as the letter notes, he can begin his tenure on the right track by abandoning this dangerous rulemaking. The proposal is a vestige of the disastrous Scott Pruitt era that would radically overhaul how the agency performs "cost-benefit analysis" on the environmental and health safeguards it is developing so as to make the results even more biased against public protections.
The broad range of public interest groups signing on to the letter confirms just how far-reaching a threat the benefits-busting rule poses, not just at EPA, but all agencies charged with protecting the public interest. Indeed, the changes it …
Originally published on Triple Crisis.
Second in a series of posts on climate policy. Find Part 1 here.
According to scientists, climate damages are deeply uncertain but could be ominously large (see the previous post). Alternatively, according to the best-known economic calculation, lifetime damages caused by emissions in 2020 will be worth $51 per metric ton of carbon dioxide, in 2018 prices.
These two views can’t both be right. This post explains where the $51 estimate comes from, why it’s not reliable, and the meaning for climate policy of the deep uncertainty about the value of damages.
A tale of three models
The “social cost of carbon” (SCC) is the value of present and future climate damages caused by a ton of carbon dioxide emissions. The Obama administration assembled an Interagency Working Group to estimate the SCC. In its final (August 2016) revision of the …
Originally published on Triple Crisis.
The damages expected from climate change seem to get worse with each new study. Reports from the IPCC and the U.S. Global Change Research Project, and a multi-author review article in Science, all published in late 2018, are among the recent bearers of bad news. Even more continues to arrive in a swarm of research articles, too numerous to list here. And most of these reports are talking about not-so-long-term damages. Dramatic climate disruption and massive economic losses are coming in just a few decades, not centuries, if we continue along our present path of inaction. It’s almost enough to make you support an emergency program to reduce emissions and switch to a path of rapid decarbonization.
But wait: isn’t there something about economics we need to figure out first? Would drastic emission reductions pass a cost-benefit test? How …
This op-ed was orignally published in the Washington Monthly.
In December of 2017, Donald Trump gathered the press for a variation on a familiar activity from his real estate mogul days. Stretched between a tower of paper taller than himself, representing all current federal regulations, and a small stack labeled "1960," was a thick piece of red ribbon – red tape, if you will. The president promised that "we're going to get back below that 1960s level." With his daughter Ivanka and other advisors by his side, Trump used comically large scissors to cut the ribbon.
Cutting regulations has been a priority for nearly every Republican politician since at least the 1980s. But the Trump-era GOP, unsatisfied with the existing deregulatory toolkit, has found a bigger pair of scissors. Call it cost-cost analysis: to justify getting rid of regulations they dislike, Republicans have decided to systematically …
Cross-posted from LegalPlanet.
The Trump administration is moving toward the view, long popular in industry, that when it regulates a pollutant, EPA can consider only the health impacts of that particular pollutant – even when the regulation will also reduce other harmful pollutants. This idea is especially important in climate change regulation because cutting carbon emissions almost always results in reductions of other pollutants like particulates that are dangerous to health. This may seem like a minor technical issue. But by ignoring the "co-benefits" of cutting carbon, the administration wants to justify drastic weakening of existing regulations. The administration's laser-like focus on the regulated pollutant is not consistent with the Clean Air Act, the legal basis for regulating carbon, or with general principles of law.
The courts have interpreted the Clean Air Act and other environmental statutes to require broad consideration of environmental impacts almost from the beginning …
For a number of days now, we’ve been hearing rumors that Cass Sunstein, President Obama’s “regulatory czar,” was on the verge of hiring conservative economist Randall Lutter to join him at the Office of Information and Regulatory Affairs (OIRA). Few personnel developments could be more discouraging to those hopeful that the Obama Administration will fulfill its many commitments to revitalize the agencies responsible for protecting public health, worker safety, and natural resources.
The best thing that can be said about the prospect of hiring Randall Lutter, a Cornell-educated economist who cut his teeth at the American Enterprise Institute (AEI), is that he is a straightforward traditionalist. No “soft” or “humane” cost-benefit analysis for him, he likes his de-regulatory policy nice and raw. Lutter was the senior economist at the benighted Food and Drug Administration during the George W. Bush Administration, and now he brings his …
Perhaps caught up in the spirit of the holiday shopping season, a large number of industry bargain hunters have been busy seeking great deals on regulatory relief at the White House's Office of Information and Regulatory Affairs (OIRA) in recent weeks. To be precise, the bureau hosted no fewer than 11 meetings with corporate interests regarding seven different regulatory issues between November 4 and November 16.
The meetings covered a range of topics. One meeting saw representatives of Shell Oil Company complaining about EPA’s proposed rule on fuel and fuel additives under the renewable fuel standards program mandated by the 2007 Energy Independence and Security Act. In a second meeting, representatives of the beef and poultry industries met with OIRA officials to attack a proposed Department of Agriculture rule regarding nutritional labels for their products. Other meetings concerned NHTSA’s updated CAFÉ standards; EPA’s rule …
The Obama Administration is expected to issue revisions to Executive Order 12,866, which specifies how the White House Office of Management and Budget (OMB) supervises federal regulatory agencies as they develop regulations to protect health, safety, the environment, and more (see the full comments on the matter submitted by CPR's board members in March).
CPR President Rena Steinzor and Board Member Rob Glicksman have issued a backgrounder on the coming Executive Order -- explaining the context and setting out six specific criteria on which to judge the Order. They are:
- Does the new EO continue to require agencies to justify proposed rules by quantifying “benefits” in dollar terms only – thus inviting agencies to ignore benefits that defy such monetization?
- Does the new EO continue to apply a “discount rate” to benefits of regulatory protections that won’t be realized for several years to come? And if it …
