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Sept. 26, 2016 by Amy Sinden

Supreme Court Remains Skeptical of the 'Cost-Benefit State'

Originally published on RegBlog by CPR Member Scholar Amy Sinden.

In the wake of the U.S. Supreme Court's opinion in Michigan v. EPA last term, a number of commentators have revived talk of something called the "Cost Benefit State." It is supposed to be a good thing, although it makes some of us shudder. The phrase was originally coined by Cass Sunstein in a 2002 book by that name. It describes a supposedly utopian government in which agencies and courts apply to all regulatory decision-making a formal cost-benefit analysis (CBA) grounded in welfare economics.

Sunstein and other eager proponents of CBA have seized on language in the Michigan case that, in the course of striking down the U.S. Environmental Protection Agency's (EPA) mercury rule, gestured toward the existence of a presumption favoring the consideration of costs in regulatory decision-making. Sunstein heralded the opinion as a "rifle shot" ringing in the arrival of the Cost-Benefit State. And John Graham and Paul Noe, in a recent RegBlog essay, echoed that sentiment, congratulating the Court on reversing its earlier anti-CBA presumption.

Indeed, in the midst of all of this hoopla, the casual observer might be forgiven for assuming that …

July 13, 2015 by Amy Sinden
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In Michigan v. EPA, handed down two weeks ago, the Supreme Court waded into the decades-long debate over the use of cost-benefit analysis (CBA) in agency rulemaking.   The decision struck down EPA’s limits on mercury emissions from power plants for the agency’s failure to consider costs, and so appears, superficially at least, like a win for the pro-CBA camp.  Indeed, Professor Cass Sunstein of Harvard—President Obama’s former “regulatory czar” and one of CBA’s most prominent cheerleaders—has been crowing about the opinion, hailing it as “a rifle shot,” ringing in the arrival of “the Cost-Benefit State.” 

But Sunstein’s celebration is a bit premature; his so-called “cost-benefit state” remains mostly in his imagination.  In fact, there is good reason to believe that the Court remains quite skeptical of the particular brand of CBA that Professor Sunstein advocates.  And that’s very good …

May 20, 2014 by Amy Sinden
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The EPA issued its long-awaited cooling water rule yesterday and the score appears to be:  Industry – home run; Fish – zero.   Which is to say, it’s bad news not just for the fish but also for all of us who depend on the health of our aquatic ecosystems – which is to say, everyone.  

This is the rule that governs the design standards for the massive cooling water intakes at power plants and other large industrial facilities that withdraw billions of gallons of water a day from our rivers, lakes and estuaries. In the process, they kill billions of fish and other aquatic organisms.   Congress was aware of this problem when it passed the Clean Water Act in 1972 and so included language directing the EPA to require those structures to “reflect the best technology available BTA for minimizing adverse environmental impact.”  

When EPA finally got around to …

Nov. 5, 2013 by Amy Sinden
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Since the Reagan Administration, federal agencies have been required by Executive Order to send their major rules to the White House’s Office of Information and Regulatory Affairs (OIRA) for review before releasing them to the public. OIRA review consists of, among other things, ensuring that agencies subject their rules to cost-benefit analysis to make sure the dollar value of their costs to industry exceeds the dollar value of the benefits they confer on the public.

It was no surprise under the Reagan administration – or more recently under the George W. Bush administration – that OIRA review served largely to delay and weaken rules. But you might be surprised to hear that the Obama administration’s record on OIRA delays has been significantly worse than the George W. Bush administration’s. A new report prepared by the Administrative Conference of the United States (ACUS) found that “in 2012 …

Oct. 2, 2013 by Amy Sinden
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It was 20 years ago this week that President Bill Clinton signed Executive Order 12866.   That was a watershed of sorts, because it marked the adoption by a Democratic administration of a key aspect of President Reagan’s anti-regulatory agenda -- the requirement that all major federal regulations undergo cost-benefit analysis.  This was not a move that pleased Clinton’s liberal base, since cost-benefit analysis was widely understood to be a tool favored by industry for weakening and delaying regulation.  But, nonetheless, Clinton signed 12866 in 1993, and it’s been with us ever since.

Maybe the staying power of cost-benefit analysis has partly to do with the superficial appeal of the basic idea.  “After all,” says the Chamber of Commerce, “it’s just basic rationality and common sense! Why would you want a rule that causes more harm than good?”  And then come the inevitable appeals to …

Dec. 14, 2012 by Amy Sinden
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Cross-posted from ThinkProgress.

“Election over, administration unleashes new rules,” trumpeted an Associated Press story this week.

What are these newly unleashed rules? Perhaps the big food safety rules that have been stalled for more than a year have gone through? Rules limiting greenhouse gas emissions from new and existing power plants? Long-awaited rules to protect coal miners’ safety?

Not quite. In fact, the AP strained to come up with just tiny examples: “The Environmental Protection Agency has proposed rules to update water quality guidelines for beaches and other recreational waters and deal with runoff from logging roads.”

The recreational waters standard was a welcome development, but not particularly consequential or abrupt. EPA was required by law to issue the recreational water standards by 2005; it has issued them now only after being ordered by a court to do so. And as the agency explained in its press …

Oct. 18, 2012 by Amy Sinden
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The Clean Water Act turns 40 today.   One of the remarkable things about those four decades is the extent to which the Act has largely withstood repeated attempts by industry to water down its technology-based standard-setting provisions with cost-benefit analysis.   Just three years ago, when the U.S. Supreme Court decided Entergy Corp. v. Riverkeeper, environmentalists largely lost one skirmish in this ongoing war, but the legacy of that opinion may actually be less harmful to the statute’s ability to protect clean water than appears at first blush.  Understanding all that requires going back to the origins of the Act.

It’s not that there wasn’t a federal statute aimed at preventing water pollution back before 1972.   It’s just that the old statute wasn’t working.   A key problem was that the old statute set standards based on the water quality of a river …

Nov. 17, 2011 by Amy Sinden
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Remember that kid on the playground who always insisted on changing the rules of the game and then still threw a tantrum when he lost? That’s just the kind of spoiled-brat behavior we’re seeing from the coal industry and its elected agents on Capitol Hill this week. Coal and other polluting industries have spent decades complaining about the federal laws that protect public health and the environment, arguing that we should change the rules by which they operate, forcing agencies to perform complicated cost-benefit analyses before they can impose limits on polluters.  They’ve always figured (and mostly they’re right) that cost-benefit analysis would result in less stringent regulation, because the benefits of protecting public health and the environment are so difficult to quantify and monetize that agencies will end up undercounting them in comparison to costs. 

Imagine their disappointment, then, when Lisa Jackson …

Sept. 29, 2011 by Amy Sinden
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This post was written by Member Scholar Amy Sinden and Policy Analyst Lena Pons.

Last week, the National Automobile Dealers Association (NADA) sponsored a fly-in lobby day to support an amendment that would strip EPA of the authority to set greenhouse gas emission standards for passenger cars and light trucks for 2017-2025. The amendment, offered earlier this year by Rep. Steve Austria (R-Ohio), would prevent EPA from spending any money to implement the 2017-2025 standards. NADA wants the National Highway Traffic Safety Administration (NHTSA) to have sole responsibility for regulating vehicle efficiency. Dealers want NHTSA to run the show because, they claim, EPA does not give adequate consideration to costs of the standards.

One problem: the auto dealers have completely misrepresented how EPA and NHTSA’s joint standards work. In fact, EPA, just like NHTSA, kept considerations of cost and technological feasibility front and center in developing …

Sept. 27, 2011 by Amy Sinden
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It all started Monday on the Daily Caller. The story claimed that the EPA, in planning regulations on greenhouses gasses, is “asking for taxpayers to shoulder the burden of up to 230,000 new bureaucrats — at a cost of $21 billion — to attempt to implement the rules.” The story spread like wild among many of the usual suspects, like National Review, Red State  and Fox News. And it was promoted by some of the top anti-regulation advocates in Congress: Senator Jim Inhofe, House Energy & Commerce’s Environment and the Economy subcommittee chair John Shimkus, and Rep. Geoff Davis, chief sponsor of the REINS Act. Inhofe and Davis both reprinted the original article directly on their site.

One problem: the story isn’t true.

Daily Caller writer Matthew Boyle found the 230,000 stat in a brief the EPA filed on September 16. That brief defends the …

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