Cost Benefit Analysis
Trump & Environmental Policy: The Sequel, Part I
Expect a lot of the same, but there could be some new twists.
They say that history never repeats itself, but it often rhymes. As in many sequels, there will be many things we’ve seen before. Much of that consisted in an all-out attack on environmental law. If you hated the original, you won’t enjoy watching the same thing the second time around. This will include massive regulatory rollbacks and expansion of fossil fuels regardless of environmental harms.
CONTINUE READINGThe Revenge of the Lawyers
Economists ousted lawyers (and law) from their central role in the regulatory process. That’s changing.
As you’ve probably heard, the Biden Administration has proposed aggressive new targets for greenhouse gas emissions from new vehicles. That’s great news. One really important aspect of the proposal relates to the justification for the proposal rather than the proposal itself. Following a recent trend, the justification is based on the factors specified by Congress …
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CONTINUE READINGRevamping Cost-Benefit Analysis
Proposed changes will make CBA more climate friendly.
Last week, the Biden White House released proposed changes in the way the government does cost-benefit analysis. CBA has been a key part of rule making for forty years. The proposal is very technical and low-key, but the upshot will be that efforts to reduce carbon emissions will get a leg up. In particular, the …
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CONTINUE READINGCutting 290,000 Tons of Water Pollution a Year, One Coal Plant at a Time
Coal is a dirty fuel. It’s not just air pollution or climate change.
EPA proposed new regulations next week to reduce the water pollution impacts of coal-fired power plants. As EPA regulations go, these count as fairly minor. They got a bit of news coverage in coal country and industry publications. But they will eliminate the discharge of thousands of tons of pollutants, including a lot of metals …
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CONTINUE READINGWasting Gas
A proposed rule limiting flaring and venting of natural gas is a win for everyone except greedy oil and gas operators.
Yesterday, the Interior Department posted a proposed rule to limit flaring and venting of natural gas on public lands. The rule will be good for everyone except the oil and gas operators who waste the gas, increasing methane and carbon emissions while giving the public nothing in return. The rule is clearly a step in …
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CONTINUE READINGCost-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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