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June 8, 2018
EPA To Review How It Adds Up The Economic Pros And Cons Of Environmental Rules
EPIC Director Michael Greenstone weighs in on the EPA’s moves to change how it calculates the economic benefits and costs of its rules.
By Dino Grandoni and Chris Mooneyvia The Washington Post
Under President Trump, the Environmental Protection Agency has sought to change the way its researchers review science. Now the agency is taking aim at the way it does economics.
The EPA took an initial step this week toward changing how it calculates the economic benefits and costs of regulatory decisions, a revision long sought by conservative allies of Trump.
Under many environmental laws, the agency is required to tabulate the economic pros and cons of measures imposed on companies to reduce air and water pollution. For years under President Barack Obama, conservatives complained that agency officials overestimated the health and financial benefits of reducing carbon emissions from power plants.
So on Thursday, the EPA announced it will solicit comments from companies, nonprofits and members of the public about how to do such cost-benefit analyses differently — bringing into the agency a long-running debate over how the government justifies new rules.
“Many have complained that the previous administration inflated the benefits and underestimated the costs of its regulations through questionable cost-benefit analysis,” EPA chief Scott Pruitt said in a statement Thursday. “This action is the next step toward providing clarity and real-world accuracy with respect to the impact of the Agency’s decisions on the economy and the regulated community.”
Michael Greenstone, an economics professor at the University of Chicago who served on Obama’s Council of Economic Advisers, said the EPA’s notice for the proposal was itself fairly “vapid,” but the news release that accompanied it critically singled out examples of analyses from the Obama administration, suggesting the EPA is heading in a particular direction.
For instance, the agency faulted how the Obama administration took into account co-benefits, those that come from “reduced emissions of a pollutant that is not the actual target pollutant of a regulation.” The proposal cited the Clean Power Plan, which targeted carbon dioxide emissions but justified the regulation based on large benefits from reducing the health impacts of particulate air pollution, which decreases along with CO2 when there is less burning of fossil fuels for energy.
“The way I like to think about it is, if I press a button and something good happens, why would I want to not count half of the good that is produced by pressing that button?” Greenstone said. “There’s no explanation given."