Keeping OIRA from Harming Efforts to Reduce Greenhouse Gas Emissions

This blog explains why President Obama should exempt proposals to mitigate climate disruption by reducing greenhouse gas emissions from OIRA review. First, the procedure that justifies OIRA review, cost-benefit analysis (CBA), just does not work for climate disruption measures. Second, CBA undermines just and legal climate policy. Third, climate disruption poses special risks that make the delay and weakening that comes from OIRA review unacceptable. 

Because of climate disruption's nature, prominent CBA proponents, such as Eric Posner and Martin Weitzman, have argued that CBA works badly for climate disruption. Weitzman emphasizes that climate disruption creates a risk of a catastrophe. Because the magnitude and likelihood of such a catastrophe remain unknown, CBA cannot include a reasonably reliable benefit estimate. Weitzman argues that this problem so dominates any rational response to climate disruption that conventional CBA becomes useless and highly misleading as a guide to climate policy.  

Eric Posner and Jonathan Masur object to administrative CBA, because even an estimate of the non-catastrophic consequences depends on a host of questionable assumptions, many of them quite political in nature. For example, valuation of climate mitigation's benefits depends heavily upon discount rates that economists typically apply to estimates of future benefits. This practice reflects the belief that people's market behavior shows a tendency to value future benefits less than current benefits. Application of this principle to climate disruption suffers from several severe problems. First, climate disruption will harm future generations even more than it harms the current one. The ethical basis for making the current generation's preferences dominate those of future generations is, to put it mildly, unclear. Relatedly, the role of environmental law, especially in this area, is to overcome, not mimic, myopia. Discount rates institutionalize myopia. At any rate, economists do not agree about the appropriate discount rate for estimating climate disruption benefits, so that benefit estimates depend on which rate the person doing the estimate happens to choose.

Estimates of future harms from climate disruption also depend heavily on economic growth rates over decades or even centuries; and economists have a poor record in forecasting economic growth rates even in the near term. Estimates also depend heavily upon guesses about the magnitude, location, and timing of future effects, questions that science, and therefore economics, cannot reliably answer.

For all these reasons, even a number of economists recognize that climate disruption CBA represents mere guesswork. The policy approach that purports to justify OIRA as an institution rationalizing policy, simply does not work in the climate disruption context.

Review by an institution committed to CBA also creates considerable tension with principles of law and justice. The United States has committed itself to the goal of avoiding dangerous climate disruption through its ratification of the Framework Convention on Climate Change. Allowing review by an institution committed to a very different goal, balancing costs and benefits at the margin, undermines our commitment to seek the avoidance of dangerous climate disruption. Furthermore, the laws governing the standards EPA will set to address climate disruption generally require maximizing what we can feasibly accomplish, not cost-benefit balancing. Finally, it is morally unacceptable to harm other people based on a conclusion that the costs to us of doing so outweigh the benefits. Justice requires us to adopt strict standards, because our past and current emissions will cause especially severe consequences in developing countries that have done relatively little to cause global climate disruption. These consequences include disappearance of island states, flooding, famine, and disease. It is ethically obtuse to avoid our responsibilities to mitigate these harms to others as much as we feasibly can based on CBA.

Finally, the climate problem has features that make the delays and weakening of regulation that OIRA routinely causes dangerous. Every year's greenhouse gas emissions add to a global store of carbon in the atmosphere. In this context, delays and weakening of standards commit us irretrievably to more total warming. The same action taken a year later has a weaker effect, because we can never make up for the greenhouse gas emissions added during the year of delay. Likewise, if we weaken a standard, we cannot undo the effect of that weakening by strengthening it later on. Delay and weakening also pose dangers for another reason. Scientists have warned that if we continue to emit greenhouse gases we may cross over "tipping points" where climate suddenly changes in dangerous ways. We are driving toward a cliff in the dark without knowing where the cliff is. Delay in tapping on the brakes can be fatal.        

When President Nixon established the EPA, he made it independent for a reason. EPA already faces considerably resistance to reasonably stringent standards from polluters. They have much greater resources at their disposal than the environmental community and invest regularly in efforts to use administrative processes and judicial review to delay, weaken, and even defeat standard setting. The danger of doing too much to address climate disruption just does not exist. We will eventually have to phase out fossil fuels and there is no right answer about just how far we should go toward that goal at the moment. Having lots of government officials involved in the decision-making will not produce a "right answer." But it will produce a slow process. It will also tend to make climate disruption policy a hostage to whatever priorities the White House at a given moment may have and will continue to do so when the occupant of the White House changes.

As of this writing, more than six years have elapsed since the Supreme Court held that greenhouse gases were pollutants under the Clean Air Act, many of them under a President committed to addressing climate disruption. In all of that time, EPA has not imposed any limits on the greenhouse gas emissions of power plants or factories, thus making climate disruption irretrievably worse than it might have been. President Obama has control over one major source of delay, OIRA review. Although President Obama cannot completely control the delays inherent in administrative processes and judicial review, he need not hamper efforts on this vital problem by adhering to procedures his predecessors put in place to protect industry from strict standards.