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Should regulators take into account harm to people in other countries? What about harm to future generations? Should we give special attention when the disadvantaged are harmed? These questions are central to climate policy and some other important environmental issues. I’ll use cost-benefit analysis as a framework for discussing these issues. You probably don’t need my help in thinking about the ethical issues, so instead I’ll focus on legal and economic considerations.

Soon after Trump took office, Republicans used the Congressional Review Act (CRA) to overturn sixteen Obama-era regulations. If they win control of the government in 2024, they'll undoubtedly do the same thing to Biden regulations. It behooves us, then, to understand the effect of these legislative interventions. A Ninth Circuit ruling last week in a case involving bear baiting, Safari Club v. Haaland sheds new light on this murky subject.

In describing cost-benefit analysis to students, I've often told them that the "cost" side of the equation is pretty simple. And it does seem simple: just get some engineers to figure out how industry can comply and run some spreadsheets of the costs. But this seemingly simple calculation turns out to be riddled with uncertainties, particularly when you're talking about regulating the energy industry. Those uncertainties need more attention in designing regulations.

Arguments and judicial reasoning in administrative law cases usually focus on the case at hand. Indeed, the Administrative Procedure Act (APA) commands that narrow focus. The APA does not give the courts any role in shaping the laws governing administrative agencies, for that is what Congress does. Instead, it gives the courts a modest, albeit difficult responsibility: They may determine whether a particular agency action is arbitrary and capricious or contrary to law. Therefore, parties challenging an agency rule they disapprove of generally argue that the agency has violated some restraint stated in the statute or exercised its discretion in an arbitrary way. But in the U.S. Supreme Court case heard last week about the scope of EPA's authority to regulate greenhouse gas emissions (West Virginia v. EPA), coal companies relied heavily on a "parade of horribles" argument — a listing of bad things that might happen in future cases if the Court upheld EPA's interpretation of the Clean Air Act in the case before the Court.

Imagine you're in the market for a new furnace. You decide to buy a more fuel-efficient system -- even though the price tag is higher -- because it will lower your monthly heating bills. Another selling point: The fuel-efficient furnace emits less carbon into the atmosphere -- a benefit you can't quite quantify but that you value nonetheless for its small salubrious effect on the planet. Policymakers go through a similar -- though much more complex -- process when implementing laws. But an obscure federal mandate known as cost-benefit analysis renders them unable to fully account for costs and benefits that are difficult to measure in dollars and cents, like the large-scale value to society of federal rules that protect public and environmental health. Despite its name, a true analysis of a rule's full benefits is impossible.

The Office of Information and Regulatory Affairs (OIRA) oversees government regulation across the federal government. Some portray it as a guardian of rationality, others as biased in favor of industry. Public information about OIRA is so limited that it's impossible to know one way or the other, due to the veil of secrecy that surrounds the place.

Scholars and policymakers should recognize the democratic benefits of public comments.

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."

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.