CPR, Public Interest Allies Call on EPA to Abandon 'Benefits-Busting' Rule

by James Goodwin

August 15, 2018

Earlier this week, 19 Member Scholars with the Center for Progressive Reform (CPR) submitted comments to the Environmental Protection Agency (EPA) that provide a detailed legal and policy critique of the agency's "benefits-busting" rulemaking. 

Since early July, EPA has been accepting feedback on an advance notice of proposed rulemaking (ANPRM) that could lead to a complete overhaul of how the agency performs cost-benefit analysis on its environmental and public health rules. Consistent with other anti-safeguard moves the Trump EPA has made, this overhaul would further rig an already rigged system for conducting these analyses. The plainly intended result would be to make it harder to justify needed public protections by putting an industry-friendly thumb on the scale. 

As the CPR Member Scholars explain, the real danger is that EPA could try to use this rulemaking to institute a one-size-fits-all "supermandate" requiring all agency decision-making to be conducted through the lens of "formal" cost-benefit analysis. Such analysis involves a nominal attempt to identify the economically "optimal" level of regulation by tallying up and converting into monetary terms all the costs and benefits of numerous regulatory "alternatives" and identifying the one that maximizes net benefits. 

Needless to say, this version of cost-benefit analysis is the stuff of textbook legend: Its lofty goal dazzles intellectual curiosity in theory but is impossible to achieve in practice. More to the point, regulatory decision-makers never actually seek to achieve this goal in any event, as an honest application of these principles would in many cases lead to the adoption of a stronger regulatory alternative than the one that ends up being selected. In reality, their prime directive remains to select a politically viable alternative that can be shown to pass a cost-benefit analysis test. 

Still, small government ideologues and corporate polluters have long sought to institute a regime of regulatory decision-making based on such formal and flawed cost-benefit analysis. The arithmetic straightjacket it creates would make it easier to roll back existing safeguards – much as the Trump EPA is seeking to do now – while at the same time making it harder to implement and enforce new rules to address pressing and emerging threats to our environment and health. 

The CPR comments explain that such a supermandate would be illegal because it clashes directly with the enabling statutes that authorize EPA's standards and safeguards. Through these laws, Congress has consistently rejected the use of formal cost-benefit analysis and instead directed the agency to use a wide variety of alternative decision-making standards, each specifically tailored to the particular environmental or public health challenges the regulations are meant to address. One provision of the Clean Water Act, for example, directs EPA to require certain classes of polluters to use the "best available technology" to clean up their messes. That's a very different standard than trying to jam all costs and benefits into a rigid mathematical formula. Congress deliberately chose these tools because they can better account for the different technical, scientific, and ethical issues that were implicated by the rulemaking it sought to authorize. 

Needless to say, these tools have been a tremendous success. For nearly 50 years, EPA regulations have made the United States a much better place to learn, work, and live by significantly reducing threats to our health and environment, all while enabling the economy to flourish. 

Based on this analysis, CPR's ...

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