EPA's Benefit-Cost Analysis in the Rulemaking Process

August 13, 2018

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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. EPA is also soliciting comment on whether and how these regulations, if promulgated, could also prescribe specific analytic approaches to quantifying the costs and benefits of EPA regulations. EPA does not propose any regulatory requirements. In particular, EPA seeks comment on the “perceived inconsistency and lack of transparency in how the Agency considers costs and benefits in rulemaking, potential approaches for addressing these concerns, and the scope for issuing regulations to govern EPA’s approach in future rulemakings.”

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. I will comment on the following points: (1) the value-added of using benefit-cost analysis in the regulatory process; (2) the extent to which guidance is presently available on the application of benefit-cost analysis to regulatory analysis; (3) the specific issue of which stakeholders should receive standing in benefit-cost analysis; and (4) the inclusion of indirect effects, also referred to as co-benefits, in benefit-cost calculations.