Benefit-Cost Analysis at the EPA

Increasing Consistency and Transparency in Considering Benefits and Costs in the Clean Air Act Rulemaking Process
August 5, 2020

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“The EPA is “soliciting comment on whether and how EPA should promulgate regulations that provide a consistent and transparent interpretation relating to the consideration of weighing costs and benefits in making regulatory decisions in a manner consistent with applicable authorizing statutes.” I will comment on three issues raised in the proposed EPA rule: (1) the discussion of the estimation of regulatory costs and benefits by means of partial equilibrium vs. general equilibrium analysis; (2) the role and presentation of primary and secondary effects (e.g. co-benefits) in benefit cost analysis; and (3) whether and the extent to which the benefits and costs experienced by international stakeholders should be included in estimating the social benefits and the social costs of domestic regulations.

I offer these comments from the perspective of someone who has taught benefit-cost analysis to working government professionals for more than 20 years, and as a past president of the Society for Benefit Cost Analysis.