Increasing Consistency and Transparency in Considering Benefits and Costs in the Clean Air Act Rulemaking Process
The EPA is right to reform the procedures and standards for its cost-benefit analyses, focusing consistency and transparency.
The are comments by Brian Mannix, offered by George Washington University for the record about the Environmental Protection Agency's proposed rule making concerning reforming how the agency conducts cost-benefit analyses.
Among the principles that should guide any federal agency when undertaking a cost-benefit analysis of a proposed rule is that the agency set boundaries upon any analysis in order to get the job done, capturing all and only the important consequences of a decision, while excluding trivial or irrelevant consequences (for instance, consequences that are indirect and or distant in the future, so that estimating their likelihood and impact is virtually guesswork). First the agency, in this case EPA, being a a domestic regulatory agency, has a legal jurisdiction limited to the United States. "Its legal authority allows it to regulate – and thereby to impose costs on – persons in the United States." As a result, in estimating benefits, the benefits counted should also be limited to those that accrue to the American people. In addition, EPA, when counting co-benefits must ensure such benefits are not being double counted, and associated costs must also be considered. "There is good reason to expect those costs will be even larger than the corresponding co-benefits."