Cost Benefit Analysis
Cost-Benefit Analysis and Deep Uncertainty
How should agencies take into account “the things we know we don’t know”?
Since 1981, cost-benefit analysis (CBA) has been at the core of the rule making process. OIRA, the so-called “regulatory czar” in the White House, must approve every significant regulation based on a review of its CBA. But CBA has had a major blind spot. It embodies techniques for analyzing possible harmful outcomes when the probability …
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CONTINUE READINGUnquantified Benefits
How can the government account for benefits that it can’t measure?
Like it or not, quantitative cost-benefit analysis has been a key part of the regulatory process for forty years and seem likely to stay that way. Yet even economists admit that they don’t (yet) know how to put numbers on the value of some important regulatory benefits. But how can those qualitative assessments be combined …
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CONTINUE READINGEnvironmental Justice, Truck Pollution, and the Biden EPA
How will EPA integrate EJ into its rule making? The answer remains murky.
EPA recently released a notice of proposed rulemaking for pollution from new heavy-duty vehicles. I was interested to see how environmental justice figured into the analysis, looking for clues about how the Biden Administration plans to make EJ part of decision making. What I found wasn’t very enlightening. Perhaps they’re still trying to come up …
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CONTINUE READINGThe Black Box of OIRA
OIRA oversees the whole regulatory state. We probably know more about the inner workings of the CIA.
The Office of Information and Regulatory Affairs (OIRA) oversees government regulation across the federal government. Some portray it as a guardian of rationality, others as biased in favor of industry. Public information about OIRA is so limited that it’s impossible to know one way or the other, due to the veil of secrecy that surrounds …
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CONTINUE READINGCost-Benefit Analysis: FAQs
Cost-benefit analysis has been a key part of the regulatory process since 1980. Here’s how it works.
Cost-benefit analysis is required for all major regulations. It’s also highly controversial, as well as being a mysterious procedure unless you’re an economist. These FAQs will tell you what you need to know about how cost-benefit analysis (CBA) fits into the regulatory process, how it works, and why it’s controversial. Q: Let’s start with a …
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CONTINUE READINGThe Regulatory Process: FAQs
Here’s an explainer on how federal regulations get issued and reviewed by courts.
Even most lawyers, let alone the rest of the population, are a bit fuzzy on how the regulatory system works. As the Biden Administration is gearing up to start a slew of regulatory proceedings, here’s what you need to know about the process. Issuing Regulations Q: Where do agencies like EPA get the power to …
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CONTINUE READINGCost-Benefit Analysis and the Biden EPA
The recent rescission of a Trump rule hints at how the Biden Administration views the role of cost-benefit analysis.
In its closing days, the Trump Administration issued a rule designed to tilt EPA’s cost-benefit analysis of air pollution regulations in favor of industry. Last week, EPA rescinded the rule. The rescission was no surprise, given that the criticisms of the Trump rule by economists as well as environmentalists. EPA’s explanation for the rescission was …
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CONTINUE READINGRecalculating the Cost of Climate Change
The Biden Administration has already started to revisit this important issue.
“The social cost of carbon” isn’t exactly a household phrase. It’s an estimate of the harm caused by emitting a ton of CO2 over the many decades it remains in the atmosphere. That’s an important factor in calculating the costs and benefits of climate regulations. For an arcane concept, it has certainly caused a lot …
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CONTINUE READINGBiden and Regulatory Review
Big changes may be coming to White House regulatory oversight.
President Biden seems to be poised to dramatically change how the White House reviews proposed agency regulations. I argued in a recent post that it would be better to expand the focus of regulatory review beyond cost-benefit analysis to include important values such as social justice and environmental quality. Biden may be moving in that …
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CONTINUE READINGReinventing Cost-Benefit Analysis
If the goal is to give decision makers the tools to make better decision, a single-dimensional metric isn’t the way to go.
One key issue facing Biden on January 20 will be the role of the the White House regulatory czar. The Office of Information and Regulatory Affairs (OIRA) is a tiny White House agency that is virtually unknown to the public. Yet it exercises outsized influence. OIRA is charged with screening all proposed government regulations using a strict …
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