The Climate Bill Inside the Infrastructure Bill

Late Friday, the House passed President Biden's infrastructure bill, the Build Back Better law. As The Washington Post aptly observed, the bill is the biggest climate legislation to ever move through Congress. It also attracted key support from some Republicans, which was essential to passing it in both houses of Congress. Biden is pushing for an even bigger companion bill, but the infrastructure bill is a huge victory in its own right. One major area of spending is transportation. Some of that goes for roads and bridges. But as The Washington Post reports, there's a lot of money for rail and mass transit.

Unless you're deeply immersed in administrative law, you may not have heard of the major questions doctrine. It's a legal theory that conservative judges have used with increasing rigor to block important regulatory initiatives. The doctrine places special obstacles on agency regulation of issues of "major economic and political significance."

Our society has finally reached a turning point on climate. I’m not referring to the “point of irreversibility” about which the United Nations warns us: In nine short years, the cascading impacts of climate change will trigger more and greater impacts -- to the point of no return. Rather, we have reached the turning point of political will for climate action. There is no going back to climate passivity or denialism. Choosing to electrify and greenify is a progressive agenda, a mainstream agenda, and an industry agenda -- though all of these agendas differ.

Cost-benefit analysis is required for all major regulations. It's also highly controversial, as well as being a mysterious procedure unless you're an economist. These FAQs will tell you what you need to know about how cost-benefit analysis (CBA) fits into the regulatory process, how it works, and why it's controversial.

In the actual work of crafting the regulatory safeguards that protect our environment and health, cost-benefit analysis has been largely ineffectual and irrelevant. Indeed, its ineffectiveness has been so profound as to prompt even its most ardent practitioners and proponents to question whether it has any impact on agency decisions at all. Meanwhile, it plays at best a minor role in the legal standards that actually govern agency decision-making. Despite all this, a certain cost-benefit orthodoxy has become remarkably entrenched in environmental policy circles. Especially in an era when so many progressive ideas are in ascendance, why does the idea of regulatory review based on cost-benefit analysis have such staying power?

Over the last 40 years, the U.S. regulatory system has played an increasingly influential role in redefining our political and economic relationships in fundamentally neoliberal terms. A key but often overlooked institutional force behind this development is the peculiar form of cost-benefit analysis that now predominates in regulatory practice. Building a new regulatory system befitting our vision of a post-neoliberal America requires a formal rejection of prevailing cost-benefit analysis in favor of a radically different approach -- one that invites public participation, permits open and fair contestation of competing values at the heart of policy debates, and recognizes and honors our social interdependencies.

Cost-benefit analysis (CBA) is inherently classist, racist, and ableist. Since these are foundational problems with CBA, and are not simply issues with its implementation, they can never be fixed by mere methodological improvements. Instead, the ongoing modernization of centralized regulatory analyses must focus on "moving beyond" CBA, and not on fixing it or improving it. Thus, in implementing President Biden's memorandum on Modernizing Regulatory Review (the Biden Memorandum), the Office of Management and Budget (OMB) should make explicit that regulatory review no longer requires CBA, even—as will be true in the typical case—when regulatory review does demand economic analysis as part of a holistic, multi-factor regulatory impact analysis.

Mississippi v. Tennessee is not only the Supreme Court’s first oral argument of the 2021-22 term, but it is also the first time that states have asked the court to weigh in on how they should share an interstate aquifer. The court’s decision could fundamentally restructure interstate groundwater law in the United States for decades -- or the case could be dismissed immediately on the grounds that Mississippi has failed to allege the proper cause of action.

President Biden has made climate change and racial justice central themes of his presidency. No doubt with these problems in mind, he has signaled a desire to rethink the process and substance of White House review of agencies' regulatory actions. On his very first day in office, Biden ordered administrative agencies to ensure that this review does not squelch regulatory initiatives nor brush aside "racial justice, environmental stewardship, human dignity, equity, and the interests of future generations." At the same time, however, Biden reaffirmed the "basic principles" of a Clinton-era executive order on White House regulatory review, subjecting agencies' major rules to a cost-benefit test. These twin inclinations -- toward acting boldly on climate change and racial justice, and toward judging regulation using cost-benefit analysis -- are trains racing toward each other on the same track. Two entrenched, perhaps even inherent, features of cost-benefit analysis practically ensure that the benefits of regulatory measures addressing climate change and racial injustice will be diminished and deformed in the process of "valuing" them.