Public Interest Comment: EPA's Benefit-Cost Analysis in the Rulemaking Process

Transparency
By: Joseph J. Cordes
August 13, 2018

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The George Washington University Regulatory Studies Center improves regulatory policy through research, education, and outreach. As part of its mission, the Center conducts careful and independent analyses to assess rulemaking proposals from the perspective of the public interest. This comment on the Environmental Protection Agency’s advanced notice of rulemaking (ANPRM) on “increasing consistency and transparency in considering costs and benefits in the rulemaking process” does not represent the views of any particular affected party or special interest, but is designed to evaluate the effect of EPA’s rulemaking process on the welfare implications of future regulations.

Introduction

In this ANPRM, EPA seeks comment on the appropriate role for regulatory analysis in decisions authorized by the different statutes EPA administers. It explicitly does not seek comment on “how best to conduct the underlying analysis of regulatory actions.” The notice recognizes that most statutory provisions require or allow some consideration of cost and benefits when setting regulatory standards to achieve public health and environmental benefits, but there can be a significant variation in terminology and specificity provided in each law regarding the nature and scope of cost and benefit considerations.  For example, some statutes direct EPA to set standards that are “appropriate,” “reasonable,” “practicable,” “achievable,” “feasible,” etc, and others refer to available technologies. Even different sections of the same statute can use different terminology, leading to consideration of “a variety of concepts of ‘costs’.” The ANPRM 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.”

This comment focuses 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.

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Read Susan Dudley's comment on this ANPRM here.

Read Brian Mannix's comment on this ANPRM here.

Read Consumer’s Guide to Regulatory Impact Analysis: Ten Tips for Being an Informed Policymaker here.