Energy & Environment

midnight

The Risks of Regulating in the Dark

January 18, 2017

By Sofie E. Miller in the Federalist Society Review, Volume 18
“Midnight” regulations are those issued after the November presidential election but before Inauguration Day as the outgoing administration attempts to finalize its regulatory policy priorities with a surge of rulemaking activity. Scholars have theorized that midnight rules are problematic because they short-circuit important procedural safeguards that ensure high-quality regulatory outcomes, like rigorous analysis, internal and external review, and public input in the rulemaking process. Stepping beyond theory, recent examples—such as the Department of Energy’s energy efficiency standards for clothes washers—illustrate that midnight rules impose real burdens.

Nudge Theory

One Standard to Rule Them All: The Disparate Impact of Energy Efficiency Regulations

October 12, 2016

Chapter by Sofie E. Miller and Brian F. Mannix
Federal regulations restrict the energy that everyday products can use, for everything from cars to microwaves. While these rules impose significant costs on consumers, the benefits are harder to identify. Agencies claim that restricting consumers’ choices provides consumers with large benefits, but this reasoning is hard to reconcile with the fact that consumers have many legitimate reasons to prefer the appliances they buy and the cars they drive. This chapter explores the reasoning behind energy efficiency regulations and why these reasons are insufficient to support the large costs they impose on consumers, especially low-income consumers.

EPA

Evaluation at EPA: Determinants of the Environmental Protection Agency's Capacity to Supply Program Evaluation

August 31, 2016

By Nick Hart
Since EPA’s inception, it has emphasized the use of prospective policy analysis tools to inform environmental decisions, including cost-benefit analysis and risk assessment. However, EPA and others rarely evaluate these same environmental policies after implementation, to inform future policy development or to modify existing policies. Nicholas Hart, PhD recently completed his dissertation in GW’s Trachtenberg School of Public Policy and Public Administration focusing on the processes and determinants that affect evaluation supply at EPA. Hart identifies ten key factors that constituted both barriers to and facilitators of evaluation. His policy brief summarizes these factors and his conclusions.

Manufactured homes

Public Comment on Energy Conservation Standards for Manufactured Housing

August 16, 2016

By Sofie E. Miller
The Department of Energy’s proposed rule would establish new energy efficiency standards for manufactured housing (formerly known as mobile homes). Due to anticipated price increases, the rule would have a regressive effect on low-income and elderly households, who are the primary occupants of manufactured homes. DOE’s analysis doesn’t take into account resale market obstacles that could prevent homeowners from recouping the higher upfront costs of efficient units, especially in Southern states with high poverty rates that bear the highest costs from the rule.

Corn field at sunset

Public Comment on EPA’s Proposed Renewable Fuel Standards for 2017 and Biomass-Based Diesel Volume for 2018

July 12, 2016

By Sofie E. Miller
EPA’s latest Renewable Fuel Standard proposal would increase the mandated total renewable fuel production to 18.8 billion gallons in 2017. Although it was intended to improve the environment, availability of new scientific, technical, and economic information shows that the RFS program is likely causing significant environmental harm through increased greenhouse gas emissions and damage to waterbodies and ecosystems. Given the environmental damage and the large economic impact of the standards, EPA should update its benefits analysis and consider using its waiver authority to further reduce the standards.

Department of Energy seal

Public Comment on DOE’s Regulatory Burden Request for Information “Reducing Regulatory Burden”

July 11, 2016

By Sofie E. Miller
To improve its ongoing retrospective review efforts, this public comment recommends that the Department of Energy incorporate plans for retrospective review into its economically significant or major rules, and provide enough time between energy efficiency standards to allow for an effective review of each rule before increasing the stringency of its standards. DOE should also consider surveys or other measures of actual consumer behavior to ensure that its assumptions about household appliance energy use are accurate. Finally, DOE should commit to measuring whether its standards negatively affect competition in regulated industries.

Energy efficiency graph

Home Appliance Energy Efficiency Standards under the Department of Energy– Stakeholder Perspectives

June 10, 2016

By Sofie E. Miller
In testimony before the House Energy and Commerce Subcommittee on Energy and Power, Senior Policy Analyst Sofie E. Miller explains that one-size-fits-all energy efficiency standards can deprive consumers of the ability purchase the appliances that best suit their unique circumstances and constraints. As a result, these regulations cost consumers rather than benefiting them, as the Department of Energy posits. In addition, these standards disparately impact low- and median-income households, and current analyses of their effects suggest that these populations bear significant costs as a result.

American dam

Managing Water in the West: Private and Public

April 05, 2016

By Randy T. Simmons
Who is in charge of water in the United States? The answer depends on where you live. In the West, a complex system of private owners, water companies, irrigation and municipal water districts, and federal agencies are able to allocate water in a relatively seamless manner. In collaboration with Utah State University's Institute of Political Economy, the George Washington University Regulatory Studies Center presents Managing Water in the West: Private and Public, a new report that shows how private property rights and market conditions enable innovation and efficient allocation of clean water.

EPA

Are Future Lives Worth More, Today, Than Our Own – Simply Because of Income Growth?

March 07, 2016

By Brian Mannix
The EPA has presented its Environmental Economics Advisory Committee a series of questions that relate to an analytical procedure for estimating the value of statistical lives saved in the future – possibly the distant future – as a result of regulations imposed today. Intertwined with the detailed analytical questions, however, is a fundamental ethical and methodological question: Is it right to force a relatively poor population to pay an inflated price – higher than they are willing to pay to save their own lives – to save the lives of a richer population, on the theory that rich people’s lives are more valuable?

United States Senate Alt Seal

Oversight of the Renewable Fuel Standard

March 02, 2016

By Sofie E. Miller
Since Congress created the Renewable Fuel Standard (RFS) program, new information has become available about the effects of mandated biofuel production indicating that the environmental effects are significant and negative. This invited testimony for the record examines evidence from the existing literature, which finds that biofuel production produces criteria pollutants, damages water systems from crop fertilizer runoff, and may not reduce greenhouse gas emissions relative to gasoline. Given this evidence, Congress should reevaluate the goals of the program and put the program on a sustainable trajectory.

Globe

Should Federal Regulatory Agencies Report Benefits to Americans from Mandated Reductions in Greenhouse Gas Emissions?

February 09, 2016

By Art Fraas, Randall Lutter, Susan E. Dudley, Ted Gayer, John Graham, Jason F. Shogren, W. Kip Viscusi
In a letter to the National Academy of Sciences on its project, "Assessing Approaches to Updating the Social Cost of Carbon," a group of prominent regulatory economists argues that federal regulatory analysis should compare domestic regulatory benefits to domestic costs. The current government approach of reporting only the global benefits of reducing carbon emissions neglects that duty. The letter recommends that the panel adopt a dual approach that refocuses regulatory impact analysis of climate regulations on domestic benefits, while providing for separate reporting of estimated global benefits.

Supreme Court

Public Comment on EPA’s Proposed Supplemental Finding that it is Appropriate and Necessary to Regulate Hazardous Air Pollutants from Coal- and Oil-Fired EGUs

January 11, 2016

By Susan E. Dudley
EPA fails to show that its MATS is appropriate and necessary to address risks to public health and the environment from hazardous air pollutants. Its preferred approach has methodological problems and does not address the Supreme Court’s direction to balance the harm of the regulation against the good. Its benefit-cost analysis is dominated by co-benefits that are not subject to the statutory authority on which it relies, and that could be addressed more cost-effectively elsewhere. EPA also ignores the fact that the $9.6 billion cost will have large detrimental effects on public health.

Regulation magazine

CAFE and the Tension Between Optimization and Competition in Rulemaking

December 14, 2015

By Brian Mannix
Choosing regulatory options that maximize net benefits is a sound principle, but it needs to be applied with an appropriate measure of humility. Regulators may be tempted to think that they can use benefit-cost analysis to determine what is “best” for the economy, and then simply mandate it. The collateral damage to competition and innovation can easily turn an otherwise well-intentioned rule into an economic disaster. Regulatory specification of a particular technology can be especially damaging when the technology is proprietary, because then the law may simultaneously lock out competitors and lock in customers.

European Power Plant

Public Comment: EPA’s Proposed Rule: Federal Plan Requirements for Greenhouse Gas Emissions From Electric Utility Generating Units

November 19, 2015

By Brian Mannix
This Public Interest Comment, filed last year in response to EPA’s proposed Clean Power Plan, addresses the relative merits of a “mass-based” or “rate-based” emissions trading program in state plans required by EPA’s rule. This same question has arisen again in the context of EPA’s development of Federal Implementation Plans (FIPs) that might be imposed on noncomplying states. The comment (which has now been filed in the FIP rulemaking) concludes that a rate-based trading program, similar to the EPA’s successful program for trading lead in gasoline in the 1980s, has compelling advantages over a mass-based program.

Truck fleet

Public Interest Comment on EPA and NHTSA's Proposed Rule: Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium and Heavy-Duty Engines and Vehicles – Phase 2

October 02, 2015

by Brian Mannix, Research Professor
Contrary to claims, EPA and NHTSA’s proposed standards to regulate greenhouse gas emissions and fuel efficiency for medium and heavy-duty engines and vehicles is not “a win-win-win.” The agencies’ RIA forecasts large benefits, mostly in the form of private fuel savings but, fails to recognize that competitive markets are far better informed, and far better motivated, to pursue these fuel savings efficiently. The net effect will be higher costs, not savings. Other external benefits might be used to justify the standards, but an honest RIA would acknowledge that these come at a price.