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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Unquantified 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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Environmental 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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The 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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Cost-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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The 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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Cost-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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Recalculating 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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Biden 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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Reinventing 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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