Originally published in The Regulatory Review
The New York Times reported recently that the U.S. Environmental Protection Agency (EPA) no longer plans to quantify the benefits of reducing exposure to certain air pollutants as it evaluates the need for regulation. In a final rule governing combustion turbines issued in January, EPA expressed concerns that its past “analytical practices often provided the public with a false sense of precision and more confidence regarding the monetized impacts of fine particulate matter (PM₂.₅) and ozone than the underlying science could fully support.” The rule announced that “to rectify this error,” EPA will no longer monetize the benefits associated with reducing these two pollutants.
Although I am sympathetic to the idea that EPA’s past practices tended to put a thumb on the scale in a way that exaggerated the benefits of reducing fine particulate matter—particulate matter with a diameter of less than or equal to 2.5 micrometers—the solution cannot be to remove those benefits from the scale altogether.
Ever since President Ronald Reagan, Presidents of both parties have expected agencies to justify their regulations on the grounds that the benefits will justify the costs. The U.S. Congress has not explicitly mandated benefit-cost analysis for all regulations, but courts are increasingly interpreting statutory language to require, or at least allow, agencies to make decisions based on commonsense tradeoffs.