cost benefit
new/ 7/18, maybe just aspect ofrisk asses?
see // sci suppr
see CTT
see lomborg
see john graham
see NERA CONSULTANT ~PARIS, KYOTO
torres-sp
ford pinto 11$ cost-benefit analysis; Ray Anderson Innerface carpets
https://medium.com/the-long-now-foundation/doing-good-better-cc86982207a
[graph wow free trade biggest bank for buck, phase out FF subsidy = cookstoves....]
loMBORG OPENED WITH A PHOTO FROM HAITI, showing a young girl dressed for school wading through the muck and garbage of a slum, with pigs in the muck right behind her. Lomborg was just back from working with the government of Haiti and the Canadian Development Agency to prioritize aid projects there. He sympathized that when people see that photo they instantly want to donate to urban sanitation in Haiti, but that is not the most effective good that can be done for the girl.
There is a limited amount of aid money that can be spent in Haiti, and in the world. (Total world aid is $200 billion a year.) It helps to look at what are the greatest multiples of good you can get for each dollar spent — the benefit-cost ratio (BCR). For urban sanitation, when you do the math on the costs of building and maintaining pit latrines and compare it with the benefits (measured in dollars) of deaths and diseases avoided, of productivity and education gains, etc., for each dollar spent, you get only about 77 cents of benefit.
How does that benefit-cost ratio (BCR) of less than 1 compare with other forms of aid such as, say, cleaner cook stoves? Indoor air pollution from traditional cooking kills 4.3 million people a year in the developing world. According to Lomborg and his Copenhagen Consensus colleagues, when you substitute cleaner fuel, you get a BCR of 15 — each dollar spent yields $15 of benefit, with drastically fewer deaths, and a far better home to grow up in. Not all problems have such direct solutions though.
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Poisoned for Pennies: The Economics of Toxics and Precaution (Google eBook)
Frank Ackerman
Island Press, May 23, 2008 - Law - 352 pages
0 Reviews
“Cost-benefit analysis” is a term that is used so frequently we rarely stop to think about it. But relying on it can lead to some dubious conclusions, as Frank Ackerman points out in this eye-opening book. For example, some economists have argued that states should encourage—and even subsidize—cigarette smoking by citizens because smoking will shorten life spans and therefore reduce the need and expense of caring for the elderly. How did the economists reach that conclusion? The answer is cost-benefit analysis, Ackerman explains.
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Then in clear, understandable language, he describes an alternative, precautionary approach to making decisions under uncertainty. Once a mere theory, the precautionary principle has now been applied in practice through the European Union’s REACH protocol. Citing major studies, many of which he has directed, he shows that the precautionary approach has not only worked, but has been relatively cheap.
Poisoned for Pennies shows how the misuse of cost-benefit analysis is impeding efforts to clean up and protect our environment, especially in the case of toxic chemicals. According to Ackerman, conservatives—in elected office, in state and federal regulatory agencies, and in businesses of every size—have been able to successfully argue that environmental clean-up and protection are simply too expensive. But he proves, that is untrue in case after case. Ackerman is already well known for his carefully reasoned attacks on the conventional wisdom about the costs of environmental regulation. This new book, which finds Ackerman ranging from psychological research to risk analysis to the benefits of aggressive pesticide regulation, and from mad cow disease to lead paint, will further his reputation as a thought leader in environmental protection. We can’t afford not to listen to him.
http://books.google.com/books?id=PYgmcdklVVUC&dq=Trichopoulos+atrazine&source=gbs_navlinks_s
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Andrew Wheeler, who headed the EPA during the Trump administration, says he’s going to focus on issues such as the global recycling waste stream and the unintended consequences of environmental regulations in his new role as a visiting fellow at the Heritage Foundation.
In one of the first interviews he has given since leaving the Environmental Protection Agency, Wheeler told Bloomberg Law he’s also going to work on helping companies embed sustainability into their missions to avoid “just checking a box.”
Other parts of his post-agency life will focus on nudging companies and governments to look at environmental issues holistically, rather than narrowly scrutinizing one medium, such as air, water, or land.
Wheeler said he won’t lobby again and has no immediate plans to rejoin a law firm. A former principal at Faegre Baker Daniels Consulting, Wheeler drew fire from environmentalists and congressional Democrats because he formerly represented the coal industry.
He also praised current EPA Administrator Michael Regan for focusing on environmental justice and per- and polyfluoroalkyl substances, a family of toxic chemicals known as PFAS.
“I’m not going to criticize at this point,” Wheeler said of Regan. “He’s only been on the job for a couple months, and it takes a little time to get a handle on the job and to pay attention to everything that’s going on at the agency. I like what’s he saying.”
Recovery From Chaos
While serving as administrator, Wheeler said he worked consciously to get the EPA on track after the chaos brought on by his predecessor, Scott Pruitt, who left the agency in July 2018 amid multiple allegations of mismanagement and misuse of taxpayer dollars.
As part of that mission, Wheeler said he made sure to involve career staff in his briefings. He said he benefited from the fact that he worked at the EPA for four years as a special assistant in the Office of Pollution Prevention and Toxics and was familiar with the agency’s inner workings.
Anne Idsal Austin, who served as the head of the EPA’s Office of Air and Radiation under Wheeler, said he did stabilize the agency’s operations after Pruitt’s exit.
“Once there was that turnover, things calmed down considerably,” said Austin, now a partner at Pillsbury Winthrop Shaw Pittman LLP. “He was able to take it from a whiplash state of, ‘Go do this and go do that’ to a calmer environment for careers and politicals.”
Regan has said several times that he inherited an agency with low morale. During his first all-hands meeting with EPA staff—which was shared with Bloomberg Law by an agency employee who wasn’t authorized to speak publicly—Regan said he’s aware that many feel the EPA’s guiding purpose “seems to have veered of course over the last few years.”
‘Lasting Improvements’
Wheeler further said he had a “full agenda” planned if Donald Trump had won re-election, including developing a cost-benefit rule and a science transparency rule for each of the EPA’s statutes.
He also said he remains hopeful that a future administration will pick up on that unfinished business, “because I just think the transparency side is very important.”
Environmentalists argued that such changes could have made it harder to justify some pollution cuts under the Clean Air Act, Clean Water Act, and other statutes by focusing cost-benefit reviews on rules’ costs, sidelining their benefits.
“For the life of me I can’t figure out why people would oppose those,” Wheeler said. “Because all it is is about making things more transparent.”
In his view, much of the pushback was political. Some EPA career staffers also resisted the effort “because they didn’t want to have to explain” their regulatory actions, Wheeler said. Had the idea come out under a Democratic president, environmentalists likely would have applauded it, he argued.
But Andrew Rosenberg, director of the Union of Concerned Scientists’ Center for Science and Democracy, denied that resistance to the cost-benefit rule was politically motivated.
“Cost-benefit analysis should never be used to decide whether or not to regulate. It only should be used to consider different options,” Rosenberg said. “No sensible organization supported that reform.”
Asked about the achievements he’s proudest of, Wheeler said the EPA “definitively proved, for the first time, that you can streamline regulations and still improve the environment at the same time.”
He also said he’s proud to have made “lasting improvements” to the EPA’s structure, including creating a new management system to improve the office’s workflow and reorganizing the agency’s 10 regions to make them work more efficiently with headquarters.
To contact the reporter on this story: Stephen Lee in Washington at stephenlee@bloombergindustry.com
resistance to sci suppr
https://insideclimatenews.org/news/27122020/trump-climate-science-epa-wheeler-biden
see series: https://insideclimatenews.org/project/the-anti-scientists-2/
...
Christine Todd Whitman, the former New Jersey governor who served as President George W. Bush’s first EPA Administrator, had experience in clashing with the White House over climate change. But she said there was nothing like the Trump administration’s effort to manipulate how science was conducted. “There were certainly people who questioned science within the Bush administration,” she said. “But there wasn’t a war on science. This has been an outright war on the EPA, a physical effort to strangle the agency.”
‘They Basically Cooked the Books’
Jeff Alson, a senior engineer with EPA’s vehicles lab in Ann Arbor, Michigan, knew something was wrong soon after Trump took office, when the fuel economy group at the Department of Transportation stopped talking to his team.
The two agency teams had worked hand-in-hand on the nation’s first greenhouse gas standards for automobiles under Obama. “We had worked together every month, most of the time every week, and sometimes every day when we had deadlines coming up,” Alson recalled recently. “We knew the names of their spouses and how many kids they had and where they went on vacation.” Now, the fuel economy group wouldn’t return the phone calls of EPA’s engineers.
The Transportation Department analysts finally unveiled their work to Alson’s dumbstruck team at EPA via a video conference call in January 2018. The cost-benefit analysis they had previously worked on together was replaced with new numbers that shrunk the benefits of reducing carbon dioxide and other air pollutants, and added new costs, like increased car crashes, noise and congestion.Instead of the government’s previous conclusion that the clean car standards would bring $100 billion in net benefits to the economy, the new analysis concluded they would result in $200 billion in net costs.
Jeff Alson discusses energy efficiency advances with an auto industry representative at a 2014 technology showcase at EPA’s National Vehicle Fuel Economy Laboratory in Ann Arbor, Michigan. Credit: EPA]
Alson, 63, had worked on dozens of cost-benefit analyses, but he had never seen such a dramatic reversal.
“I concluded that they had been told what the answers had to be if they were going to roll back the standards. They had to show the public that they were way too expensive, which they did by basically cooking the books,” Alson said. “When I saw how dishonest the whole analysis was in those early stages, that’s when I decided I wanted to get out of there. I thought maybe I can do more good on the outside.”
Alson, like Costa, left the agency and joined the EPA alumni in the Environmental Protection Network. He began speaking out and with 40 other former EPA engineers, scientists, policy analysts, attorneys and managers, filed formal commentson the proposed fuel economy rollback. A prominent economist whose work the Trump administration had heavily cited in its proposal, Antonio Bento of the University of Southern California, published a peer-reviewed critiquein the journal Science, detailing everything that the Trump team had gotten wrong.
“Inconsistent with basic economic principles,” Bento and his co-authors concluded about the Trump analysis, the most striking flaw being an assumption that looser standards would result in 6 million fewer cars on roads in the United States.
The public critiques by engineering and economics experts put the Trump administration in a bind. With the threat of litigation against its rollback looming, it had no choice but to address the flaws in its cost-benefit analysis in the final version of the “Safe Affordable Fuel-Efficient (SAFE) Vehicles Rule” published on March 31 of this year. But those corrections forced the agencies to concede that the rollback could be expensive, imposing as much as $22 billion in additional fuel bills and other costs on the economy. And that unfavorable cost-benefit analysis left the Trump rollback vulnerable in the courts, where it has been challenged by multiple states and health and environmental groups.
“They wanted to take money from our pockets and give it to the oil companies, because that’s basically what you’re doing if you make people buy cars that are less fuel efficient,” said Alson, who said a driving force behind his speaking out was to defend the reputation of the EPA.
“We did everything we could to try to do the best standards that we could so the American public would benefit,” he said.
As he was retiring, Alson said, he encouraged the young engineers on staff to continue their work, despite the setbacks of the Trump administration.
“Don’t lose faith in EPA,” he said he told them. “Because if we’re going to save the planet, people have to still have faith that the U.S. Environmental Protection Agency can do the job.”
In the End, They Were Scientists First
....
8/20 a while back i spotted dereg scam that had to do with re-naming X, or re-calculation? is it this?:
no lnx
E.P.A. Weakens Controls on Mercury
The agency is changing the way it calculates the benefits of mercury controls, a move that would effectively loosen the rules on other toxic pollutants.
By Lisa Friedman and Coral Davenport
April 16, 2020
WASHINGTON — The Trump administration on Thursday weakened regulations on the release of mercury and other toxic metals from oil and coal-fired power plants, another step toward rolling back health protections in the middle of a pandemic.
The new Environmental Protection Agencyrule does not eliminate restrictions on the release of mercury, a heavy metal linked to brain damage. Instead, it creates a new method of calculating the costs and benefits of curbing mercury pollution that environmental lawyers said would fundamentally undermine the legal underpinnings of controls on mercury and many other pollutants.
By reducing the positive health effects of regulations on paper and raising their economic costs, the new method could be used to justify loosening restrictions on any pollutant that the fossil fuel industry has deemed too costly to control.
“That is the big unstated goal,” said David Konisky, a professor of public and environmental affairs at Indiana University. “This is less about mercury than about potentially constraining or handcuffing future efforts by the E.P.A. to regulate air pollution.”
The proposed change is the latest in the Trump administration’s long-running effort to roll back environmental regulations and reduce regulatory burdens, particularly on the coal, oil and gas industries. Over the past three years the administration has weakened rules to cut planet-warming carbon dioxide emissions from coal-fired power plants, restrict coal companies from dumping debris in streams and claimed falsely that that President Trump has revived the dying coal industry.
Over the past few weeks as the nation struggled with the coronavirus, the administration has also rushed to loosen curbs on automobile tailpipe emissions, opted not to strengthen a regulation on industrial soot emissions and moved to drop the threat of punishment to companies that kill birds “incidentally.”
The deregulatory push appears designed to secure less restrictive rules quickly, in case Republicans lose control of Congress and the White House in November. A new government could move quickly under the Congressional Review Act to overturn any regulation or federal rule within 60 days of it being finalized — making any rule completed after late May or early June vulnerable.
The mercury rollback is a particular victory for Robert E. Murray,the former chief executive of Murray Energy Corporation and a top fund-raiser for Mr. Trump. Mr. Murray personally requested the rollback in a written “wish list” to top officials shortly after the president took office. The company has since declared bankruptcy and is undergoing a reorganization.
“Under this action, no more mercury will be emitted into the air than before,” Andrew R. Wheeler, the E.P.A. administrator said in announcing the rule.
Climate and Environment ›
[Keep Up on the Latest Climate News
Once nonexistent, campaign cash earmarked as "climate donations" is flowing to Joe Biden as a small but growing counterweight to the monied muscle of fossil fuels.
Environmental lawyers and public health leaders called the timing of the final mercury rule, as well as its substance, an attack on air quality.]
“What is most disconcerting to me is this administration’s lack of interest in science and, frankly, their lack of concern for our nation’s children,” said Aaron Bernstein, interim director of the Center for Climate, Health and the Global Environment at the Harvard T.H. Chan School of Public Health. “Mercury pollution in the United States damages our children’s brains before they even come into the world, and estimates are that that cost is in the billions of dollars.”
Patrick Parenteau, a professor at the Vermont Law School, noted that in virtually every environmental rollback, Mr. Trump’s E.P.A. has acknowledged in the fine print that enormous increases in health problems and deaths will occur because of increased pollution.
A plan to weaken carbon dioxide emissions at power plants, for example, predicted as many as 1,400 additional premature deaths a year. A draft analysis of the soot policy put forward this week showed that tightening the existing standard by 25 percent could save as many as 12,150 lives a year.
Two people close to the administration said the White House was concerned enough about the public perception of loosening environmental rules during the outbreak that it held the mercury plan for several weeks after it passed a review from the White House Office of Information and Regulatory Affairs. E.P.A. officials assured the White House that the agency was merely responding as required to a 2015 Supreme Court ruling that found it must justify the economic impact of the mercury standards.
The weakening of the mercury rule would be one of the most significant regulatory rollbacks engineered by the Trump administration. The existing federal regulation on mercury pollution, completed in 2012, is the most expensive clean air regulation ever written by the E.P.A.
When it published its draft cost-benefit changes last year, the Trump administration’s E.P.A. said the cost of cutting mercury from power plant emissions “dwarfs” the economic benefits and argued that the Obama rule could not be justified as “appropriate and necessary.”
The E.P.A.’s 2012 regulation was the first federal standard to require power plants to install pricey pollution controls to limit mercury emissions — at a cost to industry of $9.6 billion a year. The Obama administration justified that cost with some mathematical legerdemain of its own. The Obama E.P.A. tallied not just the benefits of reducing mercury but also “co-benefits” like reducing sulfur dioxide, fine particulate matter and other pollutants that were also curbed by the equipment.
In his announcement on Thursday, Mr. Wheeler called the Obama administration’s accounting of health benefits “dishonest.”
Driving down mercury emissions alone, the studies at the time found, would yield a $6 million annual benefit, a fraction of the cost of the controls. But by adding in co-benefits like projected gains in avoided heart disease, asthma attacks and other health problems, the total benefits reached $80 billion over five years. Overall, the Obama administration estimated that the rule would prevent 4,700 heart attacks, 130,000 asthma attacks and 11,000 premature deaths each year.
Under the Trump administration’s new rule, such co-benefits will no longer be calculated with cost, only direct benefits.
While coal producers urged Mr. Trump to roll back the rule, the vast majority of electric utility companies have agreed the cost-benefit changes may be of little help to them, because they have already spent the billions of dollars needed to come into compliance. Many of those companies urged the Trump administration to leave the mercury measure in place.
Coal plants subject to the rule “have already spent millions of dollars to install mercury equipment to reduce mercury emissions,” wrote Scott A. Weaver, the director of air quality services for American Electric Power, an Ohio-based electric utility company that operates power plants in 11 states, in a public comment on a draft of the rule.
“Rescinding the standards at this point will create new problems” Mr. Weaver wrote, noting that companies that have sought to recoup the cost of installing mercury control equipment through bills to customers may no longer legally be able to do so. That means the new rule could actually cost companies more money.
Yet in comments to the E.P.A, major coal companies and the United States Chamber of Commerce also supported changing the underlying cost-benefit analysis to prevent future rules that they might consider onerous.
Matthew Davis, a former E.P.A. scientist who worked with the agency’s office of children’s health protection to develop the original rule, said weakening the rule still represented a threat to children’s health.
“The reason we did this rule is because children and developing fetuses are harmed by mercury,” said Mr. Davis, who now works at the League of Conservation Voters.
Jeffrey R. Holmstead, an attorney for the electric utility industry who served in the E.P.A. under the second President George Bush, rejected the idea that the decision was a cynical calculation to set the stage for other regulatory rollbacks.
“It’s not as if the administration has been shy about rolling back other things,” Mr. Holmstead said, dismissing environmental concerns. “I don’t think there’s any impact whatsoever from this.”
In Congress, the Obama-era mercury rule has bipartisan support. Senator Thomas R. Carper of Delaware, the top Democrat on the Environment and Public Works committee, and Senator Lamar Alexander of Tennessee, the chairman of an energy and water appropriations subcommittee, wrote an opinion piece in USA Today in November urging the Trump administration to leave the regulation unchanged.
“Changing the rule after billions of dollars have already been spent means that utilities will have less certainty about federal regulations,” they wrote. “The gains we have made over the past decade to protect children and families from dangerous mercury pollution should not be lost.”
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https://theconversation.com/why-a-minor-change-to-how-epa-makes-rules-could-radically-reduce-environmental-protection-98042
Why a minor change to how EPA makes rules could radically reduce environmental protection
Since the Reagan administration, federal agencies have been required to produce cost-benefit analyses of their major regulations. These assessments are designed to ensure that regulators are pursuing actions that make society better off.
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[Executive Order 12291--Federal regulation
Source: The provisions of Executive Order 12291 of Feb. 17, 1981, appear at 46 FR 13193, 3 CFR, 1981 Comp., p. 127, unless otherwise noted.
By the authority vested in me as President by the Constitution and laws of the United States of America, and in order to reduce the burdens of existing and future regulations, increase agency accountability for regulatory actions, provide for presidential oversight of the regulatory process, minimize duplication and conflict of regulations, and insure well-reasoned regulations, it is hereby ordered as follows:]
In my experience working on the White House economic team in the Clinton and Obama administrations, I found cost-benefit analysis provides a solid foundation for understanding the impacts of regulatory proposals. It also generates thoughtful discussion of ways to design rules to maximize net benefits to the public.
On June 7, Environmental Protection Agency Administrator Scott Pruitt proposed changing the agency’s approach to this process in ways that sound sensible, but in fact are a radical departure from how government agencies have operated for decades.
As the agency frames it, the goal is to provide “clarity and real-world accuracy with respect to the impact of the Agency’s decisions on the economy and the regulated community.” But I see Pruitt’s proposals as an opaque effort to undermine cost-benefit analysis of environmental rules, and thus to justify rolling back regulations.
"Many have complained that the previous administration inflated the benefits and underestimated the costs of its regulations through questionable cost-benefit analysis," said EPA Administrator Scott Pruitt. "This action is the next step toward providing clarity and real-world accuracy with respect to the impact of the Agency's decisions on the economy and the regulated community."
Multiple EPA-related statutes refer to the calculation of costs and benefits, but implementation has been inconsistent. As a result, EPA has created a risk of uncertainty and confusion for states, local communities, and industry. EPA is now considering ways to codify common-sense, best practices for cost-benefit analysis in rulemaking.
Through the ANPRM, EPA will seek comments and input for the Agency to consider in developing any subsequent proposed rule. EPA will take comments on the ANPRM for 30 days after publication in the Federal Register.
Background:
Under the leadership of President Trump, EPA has taken steps to improve EPA’s cost-benefit calculations. Consistent with the President’s Executive Order 13783, EPA updated the social cost of carbon to reflect prior and best practices. While the Obama EPA estimated the social cost of carbon to be an average of $36 per ton of carbon dioxide emitted, this EPA calculated an average of $5 per ton.
EPA has also proposed a different approach to analyzing co-benefits – benefits from reduced emissions of a pollutant that is not the actual target pollutant of a regulation. Particulate matter was the co-benefit most cited by the Obama EPA. In fact, particulate matter co-benefits accounted for more than 80% of the purported benefits of all of Obama’s air rules. The Clean Power Plan (CPP), a rule aimed at carbon dioxide reductions, derived most of its benefits from a reduction in particulate matter. When EPA issued its proposed repeal of CPP, it provided a transparent account of the impact of the rule on the “targeted pollutant” – carbon dioxide.
Earlier this morning, the Wall Street Journal published an editorial on Administrator Pruitt's efforts to "stop the EPA's numerical shenanigans" and reform cost-benefit analysis at the Agency...
https://www.wsj.com/articles/cost-benefit-reform-at-the-epa-1528326402 no name
e importance of co-benefits
Have you ever done something for more than one reason? An action that you justified because it “kills two birds with one stone”? When a regulation leads to improvements that it was not designed to produce, government agencies call the unexpected payoffs “co-benefits.”
For example, the Clean Air Act’s Acid Rain Program was designed to reduce sulfur dioxide pollution from electric power plants, a key ingredient in acid rain. Some utilities complied by installing devices called scrubbers to capture sulfur dioxide emissions from plant exhaust.
The scrubbers also reduced fine particulate matter, which is linked with a wide range of health effects that can cause premature deaths and illnesses. This represented a huge co-benefit – one that economists have estimated to be worth US$50 billion to $100 billionyearly.
Historically, federal agencies have given co-benefits full weight in regulatory impact analysis because they help to show how Americans would be better off under the policy for multiple reasons. Pruitt wants to change this policy.
:{According to an EPA analysis, amendments to the Clean Air Act in 1990 that tightened emissions standards will produce benefits through 2020 that exceed their costs by a factor of more than 30 to one.:(style="margin:0px;padding:0px;border:0px;outline:0px;vertical-align:baseline;background:transparent"):}: :{:(style="margin:0px;padding:0px;border:0px;outline:0px;vertical-align:baseline;background:transparent"):}:USEPA
Eliminating co-benefits from rule-making
Pruitt’s proposal solicits public comment on how to weigh co-benefits from pollution reductions. While this request may appear neutral, it reflects an interest in trying to minimize or eliminate consideration of co-benefits.
Why would EPA’s administrator seek to reduce estimated benefits of regulations? As I see it, the agency faces a regulatory conundrum. President Trump issued an executive order in 2017, focused on the costs of regulations that required agencies to eliminate two rules for every new rule they issue. Since regulations have benefits as well as costs, if an existing rule delivers more benefits than costs, then striking it would impose net harm on the public.
For example, Pruitt is seeking to roll back three Obama administration air pollution initiatives: the Clean Power Plan, which limits greenhouse gas emissions from power plants, and combined carbon emission and fuel economy standards for light-duty vehicles and heavy-duty vehicles. Halting these rules would save money for some electric utilities and vehicle manufacturers, but would also greatly increase air pollution.
Specifically, one recent analysis estimates that eliminating these rules would increase premature deaths from inhaling fine particulate matter by more than 80,000 over a decade. In today’s dollars, and using the current value EPA employs to monetize mortality risk reduction, public health costs from reversing these three rules amount to nearly $75 billion per year – far more than any potential benefits to industry. [vid] Harvard University professor Douglas Dockery explains the impacts of air pollution on health and the public benefits of pollution controls.
Even for an administration with a strong deregulatory tilt, such a step would raise political red flags. It also would run afoul of another executive order that has governed regulatory review in Democratic and Republican administrations since 1993, and requires agencies to issue rules if their benefits justify the costs. The Obama administration concluded that each of these air pollution regulations passed that test.
But what if the EPA can find a way to ignore major categories of benefits, such as zeroing out estimated co-benefits from reducing premature deaths? Then regulatory rollback could appear to pass a cost-benefit test on paper, even if it makes the American people worse off in the real world.
Pruitt has already taken other steps in this direction. Notably, the EPA has reduced its estimate of the damages from climate change from $42 per ton of carbon pollution at the end of the Obama administration to as low as $1 per ton now. This makes the social benefit of actions that reduce greenhouse gas emissions, such as the Clean Power Plan, look much smaller than they actually are.
:{EPA Administrator William Reilly, left, watches as President George H.W. Bush signs the Clean Air Act Amendments, November 15, 1990.:(style="margin:0px;padding:0px;border:0px;outline:0px;vertical-align:baseline;background:transparent"):}: :{:(style="margin:0px;padding:0px;border:0px;outline:0px;vertical-align:baseline;background:transparent"):}:USEPA archive/Carol T. Powers
Gaming the numbers
The late Nobel laureate Gary Becker, who often called for limited government intervention in the economy, once wrote that “cost-benefit analysis may also be useful for undermining misleading claims of self-interested political pressure groups..” By this he meant that rigorous, transparent assessment of a regulation’s social benefits and costs makes it politically hard for special interests such as the coal industry to hijack the rule-making process.
Some conservative critics argue that under the Obama administration, the EPA gamed cost-benefit analysis to justify overregulation by introducing what they describe as speculative “social costs” and “social benefits.” But this approach is not new or imprecise. When regulators do cost-benefit analysis, they are calculating the net change in “social welfare” that a regulation is expected to produce. This term comes from the White House guidanceto agencies for conducting such analysis. Economists define social welfare as social benefits minus social costs.
The EPA used this process during the Reagan administration to show that the public would benefit from reducing lead in gasoline. Under President George H.W. Bush, the EPA’s cost-benefit analysis supported phasing out chlorofluorocarbons that were destroying the ozone layer. Cost-benefit analysis has also supported hundreds of other EPA regulations over more than 30 years.
Indeed, transparent analysis of the social benefits and costs of regulations helps to hold regulators accountable. But if agencies put their thumbs on the scale by excluding major public health benefits, they will weaken the legitimacy of regulatory policy and make the American people worse off.
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- Joseph Aldy Associate Professor of Public Policy, Harvard University
Disclosure statement
Joseph Aldy receives funding from the Alfred P. Sloan Foundation and the Administrative Conference of the United States. He is affiliated with Resources for the Future, the National Bureau of Economic Research and the Center for Strategic and International Studies