environmental economics
The Decline and Fall of the “Regulatory Czar”
Now, the office doesn’t even have a home page, and its boss is lawyer who faces possible disbarment.
OIRA, the White House Office of Information and Regulatory Affairs, was known as “the most powerful agency you’ve never heard of. That was only three years ago. Under Trump, however, OIRA seems to have become a minor subdivision of the Office of Management and Budget run by Russell Vought. The main purpose of the office was to oversee the use of cost-benefit analysis by regulatory agencies. The Trump Administration has all but abandoned this analytical tool by refusing to quantify regulatory benefits, so it’s now cost-benefit analysis. As a result, OIRA seems to be adrift. One sign of this declining importance is that it’s hard to even find the name of the person running the office.
CONTINUE READINGEveryday Christmas: The Gift of the Commons
Clean air. Clean water. We receive these public goods every day without payment
One of the Christmas classics is the Jimmy Stewart movie, It’s a Wonderful Life. George Bailey, Stewart’s character, is despondent about his life until he learns how much he has unknowingly helped others and how grateful they are. It’s heartwarming, if also a bit corny. There’s a flip side to that story: the need to remember …
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CONTINUE READINGThe Woeful Economics of a Misguided Rollback
The costs of Trump’s rollback of key climate rules far outweigh any benefits.
Trump’s rollback of regulations limiting emissions from power plants is an economic disaster. According to economists, health damages far exceed savings from lower compliance costs. Just considering health impacts alone, the net cost of the rollback will be $129 billion through 2050. Climate damages add another $148 billion in costs.
CONTINUE READINGDoes the Law Require Cost-Benefit Analysis?
According to the D.C. Circuit, the answer is no.
Putting aside the particulars of the case, it seems wrong to apply the same standard (monetized cost-benefit analysis) to every provision in environmental law. These provisions have different language, reflecting differences in congressional priorities. Some provisions, for instance, may be designed push industry to find innovative solutions; others may reflect Congress’s value judgments or a desire to limit EPA’s discretion. We shouldn’t assume that the myriad differences in statutory language are irrelevant and that Congress wanted agencies to adopt the same method of making decisions in every case.
CONTINUE READINGTrump Shoves Economic Analysis and Science to the Curb
The MAGA agenda takes precedence over data and analysis.
If you were looking for data-driven regulatory policy, you’re not going to find it in this Administration. On the contrary, Trump has marginalized economic analysis and wants to bulldoze environmental science. Thus, we are likely to get policies that are bad for the environment without being cost-justified, while ignoring policies who environmental benefits outweigh economic costs.
CONTINUE READINGTalking Climate Policy with an Energy Economist
An interview with leading energy expert Catherine Wolfram
Catherine Wolfram, a leading energy economist who has researched the impact of the Inflation Reduction Act, shares her views of the impact of the IRA, its likely fate, and the energy policies of the incoming Trump Administration. Wolfram served as the Deputy Assistant Secretary for Climate and Energy Economics at the US Treasury in 2021-2022
CONTINUE READINGThe Environmental Gifts of the Magi
Clean air. Clean water. We receive these public goods every day without payment, as gifts from everyone to all of us.
One of the Christmas classics is the Jimmy Stewart movie, It’s a Wonderful Life. Stewart’s character is feeling suicidal, until he learns how much he has unknowingly helped others and how grateful they are. It’s heartwarming if also very corny. There’s a flip side to that story: the need to remember how much others have contributed …
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CONTINUE READINGFive Myths and Half-Truths About California Cap and Trade
California has spent years fine-tuning its trading system, with results that aren’t always easy to gauge.
A key part of California’s climate policy has always been its cap and trade system. Because the regulations aren’t very transparent, there have been a lot of misconceptions about the system. I’ve been digging into the rules, the explanatory website set up by the California Air Resources Board (CARB), and secondary sources to try to …
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CONTINUE READINGIs Capitalism to Blame?
Some people think we need to abolish capitalism to save the environment.
Bernie Sanders has a book called It’s OK to be Angry at Capitalism. There are certainly a lot of people across the political spectrum who feel that way. Capitalism is blamed for environmental destruction by many of the more radical segments of the Left. That’s not too surprising given the historic connection between the more …
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CONTINUE READINGThe IRA’s Implicit Cost of Carbon
Here’s a simple way to think about a hard problem.
The social cost of carbon is important in many regulatory decisions made by the executive branch. It basically measures the benefit of cutting one ton of carbon emissions. Figuring out the cost of carbon based on an analysis of climate impacts is very tricky. However, there’s another way to think about the problem: We might …
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