Cost Benefit Analysis
Legal Mandates to Consider the Social Cost of Climate Change
Considering climate impacts isn’t just a good idea. It’s the law.
Many people seem to think that considering climate impacts and the social cost of carbon was just a policy decision by the Obama Administration, which Trump if he doesn’t buy the reality of climate change. But it’s not that easy. But there are strong arguments that considering climate change is mandatory. First, the whole idea of considering …
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CONTINUE READINGTurnabout is Fair Play
The same tools that have been used to stymie the Obama Administration can be turned against Trump.
Conservatives and industry have perfected some legal tools to block regulation by the Obama Administration. Those tools can be turned against them, by using the same tools to block anti-regulatory moves by the Trump Administration. As a professor, I don’t necessarily agree with all of them. But as a lawyer, I wouldn’t hesitate to use them …
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CONTINUE READINGThe Clean Power Plan — Low Cost, High Benefits
Despite claims by industry and conservatives, the CPP’s costs are completely manageable.
The Supreme Court’s stay of EPA’s Clean Power Plan was a surprise, and a questionable action on many grounds. It now seems clear that the stay — along with much of the political fuss about the CPP — was based on very questionable economics. In terms of the stay, a team of economists at Resources …
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CONTINUE READINGThe Supreme Court Vacancy and EPA’s Mercury Rule
The rule limiting toxic pollution from coal plants now has a rosier future.
Among the many ramifications of the current vacancy on the bench, its effect on the EPA’s mercury rule seems to have escaped much attention. It may already have helped EPA defeat an effort by states to get a stay from Chief Justice Roberts. But it has much broader significance. Some background: The Supreme Court, in a …
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CONTINUE READING“Necessary and Appropriate”
EPA has now formally proposed its response to the Supreme Court’s opinion in Michigan v. EPA
Although the Paris talks are justifiably getting the lion’s share of the attention, there have been other significant environmental actions recently. One of those involves the EPA’s effort to reduce toxic emissions from power plants (particularly coal-fired plants). The Clean Air Act gives special treatment to toxic emissions from power plants. Other sources are regulated …
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CONTINUE READINGThe Shadow Price of Carbon
Merging Cost-Benefit Analysis and Feasibility Analysis
The U.S. government has devoted a lot of time and effort to estimating the social cost of carbon. This is basically a standard exercise in cost-benefit analysis, following a familiar three-step process: 1. Impacts. Figure out the physical impacts of the emissions. This involves setting up some emissions scenarios and then running computer simulations to …
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CONTINUE READINGMichigan v. EPA: Policymaking in the Guise of Statutory Interpretation
In Michigan v. EPA, the majority followed its own policy views, not those in the statute.
The majority opinion by Justice Scalia has gotten most of the attention. Most notably, he wrote that “[o]ne would not say that it is even rational, never mind “appropriate”, to impose billions of dollars in economic costs for a few dollars in health or environmental benefits.” Indeed, “[n]o regulation is ‘appropriate’ if it does significantly …
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CONTINUE READINGInterpreting Michigan v. EPA
The opinion seems likely to have very limited repercussions.
In bringing the mercury rule to the Supreme Court, industry was hoping for a ruling that EPA had to balance costs and benefits (and could only include benefits relating to mercury). What they got was far less than that. Here, I’d like to address some key questions about the opinion. 1. When does EPA have …
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CONTINUE READINGMercury Rising: The Court Reverses EPA’s Regulation
This was not a great decision for EPA, but it could have been much worse.
The Court has just now decided the Michigan case, involving EPA’s mercury regulation. As Ann Carlson explained in an earlier post, a lot was at stake in the case. The Court ruled 5-4 against EPA. This passage seems to be key to the Court’s reasoning: One would not say that it is even rational, never mind …
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CONTINUE READINGWhose Benefits Count?
EPA is right to include climate impacts on foreign countries in its cost-benefit analysis of regulations.
When a regulation benefits people outside the U.S., should those benefits be counted? Or should a cost-benefit analysis include only positive and negative domestic impacts? As a recent paper by Ted Gayer and Kip Viscusi highlights, EPA has been counting the benefits of restricting carbon emissions for the entire world, not just the U.S. …
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