EPA

Regulatory Science and Policy: A Case Study of the National Ambient Air Quality Standards

September 09, 2015

By Susan E. Dudley
Effective environmental policy depends on reliable scientific information and transparent policy choices; it is challenged not only when science is politicized, but also when policy is “scientized.” This paper suggests that current practices scientize policy and threaten not only regulatory outcomes, but the credibility of the scientific process. Using a case study of the procedures by which the Environmental Protection Agency sets National Ambient Air Quality Standards under the Clean Air Act, it illustrates some of the perverse incentives involved in developing regulations, and offers possible mechanisms to improve those incentives and resulting policy.

Graph

Whose Benefits Are They, Anyway? Examining the Benefits of Energy Efficiency Rules 2007 - 2014

September 02, 2015

By Sofie E. Miller
Over the past decade, regulations setting energy efficiency standards have proliferated. These rules account billions of dollars in annual regulatory benefits, but the Department of Energy relies on private benefits and benefits to residents of other countries to justify the standards, contrary to typical benefit-cost analyses. This paper examines the composition of benefits resulting from DOE’s energy efficiency rules 2007 – 2014, and finds that these rules don’t pass a traditional cost-benefit test when relying on traditional analytical assumptions.

US and EU flags

The Role of Transparency in Regulatory Governance: Comparing US and EU Regulatory Systems

August 11, 2015

By Susan E. Dudley & Kai Wegrich
This review of regulatory procedures in the EU and US suggests that each values good regulatory practices, such as transparency, public consultation, and regulatory impact analysis, but emphasizes them to different degrees at different stages in the regulatory process. Particularly for regulations that address human health risks, both jurisdictions should be more transparent regarding the uncertainties surrounding estimates of regulatory outcomes and the effect of key assumptions on those estimates. A transparent process for evaluating regulatory effects ex post could also improve regulatory analysis and outcomes.

Pages in the federal register graph

Can Fiscal Budget Concepts Improve Regulation?

July 16, 2015

By Susan E. Dudley
Despite efforts to ensure that new regulations provide net benefits to citizens, the accumulation of regulations threatens economic growth and well-being. As a result, the U.S. legislature is exploring the possibility that applying fiscal budgeting concepts to regulation could bring more accountability and transparency to the regulatory process. This paper examines the advantages and challenges of applying regulatory budgeting practices, and draws some preliminary conclusions based on successful experiences in other countries.

Congress 1941

Improving Regulatory Accountability: Lessons from the Past and Prospects for the Future (as published)

July 15, 2015

By Susan E. Dudley
This Article examines efforts by the three branches of federal government to oversee regulatory policy and procedures. It begins with a review of efforts over the last century to establish appropriate checks and balances on regulations issued by the executive branch and then evaluates current regulatory reforms that would hold the executive branch, the legislative branch, and the judicial branch more accountable for regulations and their outcomes.

Pie chart: ANPRMs by type of rulemaking

Notice & Comment: How Agencies Use Advance Notices of Proposed Rulemaking

June 23, 2015

By Sofie E. Miller & Saayee Arumugam
Agencies already use ANPRMs to gather public input, and have for many years. However, our analysis sought to answer these questions: How frequently do agencies use ANPRMs? Which agencies use ANPRMs most frequently? Do agencies use ANPRMs to solicit public input on minor regulatory issues, or for bigger policy questions? This analysis provides answers to each of these questions for use by policymakers, agencies, and the public alike as we contemplate practical solutions for improving the regulatory process.

Cover of Policy Perspectives magazine

One Discount Rate Fits All? The Regressive Effects of DOE's Energy Efficiency Rule

May 20, 2015

By Sofie E. Miller
This paper examines the Department of Energy's (DOE) reliance on low discount rates to estimate the benefits of its energy efficiency standards and uses existing literature on implicit consumer discount rates to calculate a range of benefits for DOE’s furnace fan rule. While DOE calculates large net benefits from its energy efficiency rule, using discount rates that better represent average consumer time preferences shows that this standard results in net costs. Furthermore, given the variation in consumer discount rates by income, this standard is effectively a transfer payment from low- and median-income households to high-income households.

JPAM journal cover

Point/Counterpoint: Valuing Internalities in Regulatory Impact Analysis

May 13, 2015

By Brian Mannix & Susan Dudley
In this Point/Counterpoint article series with Cass Sunstein & Hunt Allcott, Mannix & Dudley argue that allowing regulators to control consumers 'for their own good' – based on some deficiency in the consumers themselves rather than any failure in the marketplace – is to abandon any serious attempt to keep regulatory policy grounded in any objective notion of the public good.

Crystalline 200

Will the Occupational Safety and Health Administration's Proposed Standards for Occupational Exposure to Respirable Crystalline Silica Reduce Workplace Risk?

March 26, 2015

By Susan E. Dudley & Andrew P. Morriss
This article finds that OSHA's proposed rule would contribute little in the way of new information, particularly since it is largely based on information that is at least a decade old—a significant deficiency, given the rapidly changing conditions observed over the last 45 years. The article concludes with recommendations for alternative approaches that would be more likely to generate information needed to improve worker health outcomes.

Side by side

The CPSC's Off-Road Adventure

March 23, 2015

By Joseph Cordes and Blake Taylor
This article raises issues with the Consumer Product Safety Commission's proposal to regulate recreational off-highway vehicles, commonly referred to as side by sides. CPSC issues rules to mitigate "unreasonable risks." In order to deem a risk as either reasonable or unreasonable, it is necessary to have information on the risk rate. The CPSC, however, proposed this rule without reliable information on the rates of injury and death associated with use of side by sides. Additionally, it is possible that the proposal rule, if enacted, would have a negative impact on consumer surplus if the safety standards make the products undesirable. Such a loss, however, is absent in the Commission's assessment of expected benefits and costs.

Susan Dudley with Kai Wegrich

Achieving Regulatory Policy Objectives: An Overview and Comparison of U.S. and EU Procedures

March 10, 2015

By Susan E. Dudley & Kai Wegrich
This paper aims to provide a descriptive analysis of procedural differences in regulatory development between the United States and the European Union to serve as a factual basis for understanding the regulatory challenges and opportunities for transatlantic trade. It summarizes regulatory procedures in each jurisdiction, dividing the process for establishing regulations into four stages: 1) agenda setting, 2) regulatory development, 3) final determination and opportunities for challenge, and 4) implementation and enforcement. After presenting the procedures in the U.S. and EU, the paper compares how the shared goals for achieving a regulatory system that is evidence based, transparent, and accountable are achieved in the two jurisdictions.

Washington monument with cranes and scaffolding

Improving Regulatory Accountability: Lessons from the Past and Prospects for the Future

January 21, 2015

By Susan E. Dudley
This article examines efforts by the three branches of federal government to oversee regulatory policy and procedures. It begins with a review of efforts over the last century to establish appropriate checks and balances on regulations issued by the executive branch, and then evaluates current regulatory reforms that would hold the executive branch, the legislative branch, and the judicial branch more accountable for regulations and their outcomes.

randall lutter

Improving Weight of Evidence Approaches to Chemical Evaluations

December 16, 2014

By Randall Lutter et al
Federal and other regulatory agencies often use or claim to use a weight of evidence (WoE) approach in chemical evaluation. Their approaches to the use of WoE, however, differ significantly, rely heavily on subjective professional judgment, and merit improvement. We review uses of WoE approaches in key articles in the peer-reviewed scientific literature, and find significant variations. We find that a hypothesis-based WoE approach, developed by Lorenz Rhomberg et al., can provide a stronger scientific basis for chemical assessment while improving transparency and preserving the appropriate scope of professional judgment. Their approach, while still evolving, relies on the explicit specification of the hypothesized basis for using the information at hand to infer the ability of an agent to cause human health impacts or, more broadly, affect other endpoints of concern. We describe and endorse such a hypothesis-based WoE approach to chemical evaluation.

budget outlays over time

Tight Budgets Constrain Some Regulatory Agencies, But Not All

October 08, 2014

By Susan E. Dudley & Melinda Warren
Each year we examine the President’s proposed Budget of the United States to identify the outlays and staffing devoted to developing and enforcing federal regulations. This "regulators' budget" report covers agencies whose regulations primarily affect private-sector activities, and expressly excludes budget and staffing associated with regulations that govern taxation, entitlement, procurement, subsidy, and credit functions. This year's report finds that while tight budgets are constraining regulatory spending at many federal agencies, those that are at least partially funded by fees on the entities they regulate are supporting substantial increases in regulatory outlays and staffing.

department of energy

Looking Back to Move Ahead

October 08, 2014

By Sofie E. Miller
Retrospective review is meant to ensure that regulations achieve their intended outcomes and to improve agencies' use of ex ante analysis by comparing projected outcomes with actual results. To that end, the Department of Energy sought public input on how to best promote periodic retrospective reviews of its rules and how to select the rules to review. This article recommends that DOE should take three steps to further its retrospective review efforts. First, it should incorporate plans for retrospective review into its economically significant or major rules. Second, it should allow enough time between releases of new energy efficiency standards to allow for an effective review of each rule’s effects before issuing updated rules. Third, it should use the Herfindahl-Hirschman Index (HHI) to measure whether its existing energy efficiency standards have had negative effects on competition in the regulated industries.