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EPA Asks for Public Comment on Improving Cost-Benefit Analysis of Regulations  

On June 7, the Environmental Protection Agency (EPA) issued an advance notice of proposed rulemaking (ANPRM) soliciting information on how the agency estimates costs and benefits in the rulemaking process and on potential approaches to improve the consistency and transparency of such analyses. The agency specifically seeks comment on “whether, and if so, how EPA should promulgate regulations that specify” how it will consider costs and benefits in future rulemakings.

Inside Climate News denounced EPA Administrator Scott Pruitt for attempting to “downplay human health and climate benefits of environmental regulations in favor of cutting costs for polluting industries.” The Wall Street Journal, on the other hand, lauded Pruitt for working to “stop [the Obama] EPA’s numerical shenanigans” that inflated the benefits and lowballed the costs of its regulations.

 

Each of those reviews may be reading too much into the document. The fact is, the EPA’s estimation practices are not always consistent and transparent. That is due to three principal causes.

First, statutory provisions that require or authorize consideration of costs often provide “little, if any direction” on what the key terms mean.

Second, court decisions have extended the concept of cost “well beyond financial outlays by regulated entities to include all of the negative repercussions of this action, whether economic or otherwise.”

Third, the agency’s ability to estimate costs is “limited by the state of scientific and economic modeling, quantification methods, and available data—all of which change over time and across industries and sectors of the economy.”

 

If I am not mistaken, the ANPRM indicates that the current state of affairs is something of a morass or muddle. The agency is asking for public comment with “enough detail and ... sufficient information” to make its cost and benefit assessments more consistent and transparent. Hardly the stuff of either skullduggery or heroism.