CPR Comments Deliver Scathing Critique of EPA 'Benefits-Busting' Rule

James Goodwin

Aug. 4, 2020

Yesterday, I joined a group of CPR Member Scholars and staff in submitting comments on the Environmental Protection Agency's (EPA) "benefits-busting" proposal, which would drastically overhaul how the agency performs cost-benefit analysis on its biggest Clean Air Act rules. As we explain in our comments, the action is a thinly veiled effort to rig the results of those analyses – more so than they already are – to make it harder to issue appropriately strong safeguards, thereby sabotaging the effective and timely implementation of the Clean Air Act.

Our comments lay out in detail several shortcomings of the benefits-busting proposal. To begin, the EPA lacks legal authority to issue a binding rule of this kind. But even if the agency did have such authority, the proposal would do little, if anything, to improve its regulatory decision-making given that cost-benefit analysis is either superfluous to or even prohibited by the Clean Air Act's provisions.

The proposal's provisions are excessively burdensome and many would be impossible to satisfy in practice. Conveniently for corporate polluters, these provisions would be judicially enforceable, handing them a powerful tool to block any Clean Air Act rules they find too inconvenient to their bottom lines. To avoid such risky litigation, the EPA is likely to resort to a kind of strategic self-censorship by issuing rules that are weaker than what the Clean Air Act requires.

In addition, the proposal's requirements are conspicuously aimed either at putting a thumb on the cost side of the scale or at forcing the EPA to disregard benefits altogether, producing results that are systematically and intentionally skewed against protective safeguards. To accomplish this objective, the proposal wades deep into the agency's risk assessment practices. Many of these provisions would so arbitrarily depart from scientific norms, bias assessment outcomes, and undermine their usefulness for Clean Air Act rulemakings that they risk contaminating the quality and scientific integrity of the EPA's risk assessment practices for decades to come.

Another significant provision of the benefits-busting proposal seeks to skew the EPA's cost-benefit analysis by forcing the agency to include in its final rule preambles a novel new cost-benefit analysis table that would exclude so-called "co-benefits." Such arbitrary treatment of these benefits has no basis in economic theory, but it would have the intended effect of making many of the EPA's Clean Air Act rules look like big economic losers on paper.

That the benefits-busting proposal is intended to rig the EPA's cost-benefit analysis methodologies against strong Clean Air Act rules is further confirmed by the fact that it ignores several real shortcomings in the practice of cost-benefit analysis. Doubtless that's because reforms to address these shortcomings would likely have the effect of generating cost-benefit analyses that are even more supportive of stronger regulatory protections than what the agency legitimately produced until the Trump administration took office in 2017.

In light of these significant flaws, and given the more pressing challenges that the EPA faces in effectuating the goals of the Clean Air Act, we concluded our comments by calling on the agency to abandon this misguided proposal. We further note that with the agency already engaged in a process to update its Guidelines for Preparing Economic Analysis, a document that has long guided its cost-benefit analysis practices, it would be better off dedicating its limited resources to that effort instead, and in particular by pursuing our recommendations for addressing the actual shortcomings in cost-benefit analysis.

I was joined in submitting these comments by CPR Member Scholars Catherine O'Neill, Sid Shapiro, and Amy Sinden and by CPR Policy Analyst Darya Minovi.

In addition to these organizational comments, CPR also led a set of public interest community comments opposing the benefits-busting proposal. In all, a diverse group of eight public interest, labor, and grassroots organizations signed on.

To learn more about the benefits-busting proposal, check out this handy memo that contains a topline analysis of its major provisions.

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