How a Minor Change to EPA Rules Could Slash Environmental Protection
By Joseph Aldy
Since the Reagan administration, federal agencies have been required to produce cost-benefit analyses of their major regulations. These assessments are designed to ensure that regulators are pursuing actions that make society better off.
In my experience working on the White House economic team in the Clinton and Obama administrations, I found cost-benefit analysis provides a solid foundation for understanding the impacts of regulatory proposals. It also generates thoughtful discussion of ways to design rules to maximize net benefits to the public.
On June 7, U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt proposed changing the agency's approach to this process in ways that sound sensible, but in fact are a radical departure from how government agencies have operated for decades.
As the agency frames it, the goal is to provide "clarity and real-world accuracy with respect to the impact of the Agency's decisions on the economy and the regulated community." But I see Pruitt's proposals as an opaque effort to undermine cost-benefit analysis of environmental rules, and thus to justify rolling back regulations.
The Importance of Co-Benefits
Have you ever done something for more than one reason? An action that you justified because it "kills two birds with one stone"? When a regulation leads to improvements that it was not designed to produce, government agencies call the unexpected payoffs "co-benefits."
For example, the Clean Air Act's Acid Rain Program was designed to reduce sulfur dioxide pollution from electric power plants, a key ingredient in acid rain. Some utilities complied by installing devices called scrubbers to capture sulfur dioxide emissions from plant exhaust.
The scrubbers also reduced fine particulate matter, which is linked with a wide range of health effects that can cause premature deaths and illnesses. This represented a huge co-benefit—one that economists have estimated to be worth $50 billion to $100 billion yearly.
Historically, federal agencies have given co-benefits full weight in regulatory impact analysis because they help to show how Americans would be better off under the policy for multiple reasons. Pruitt wants to change this policy.
Eliminating Co-Benefits From Rule-Making
Pruitt's proposal solicits public comment on how to weigh co-benefits from pollution reductions. While this request may appear neutral, it reflects an interest in trying to minimize or eliminate consideration of co-benefits.
According to an EPA analysis, amendments to the Clean Air Act in 1990 that tightened emissions standards will produce benefits through 2020 that exceed their costs by a factor of more than 30 to one.USEPA
Why would EPA's administrator seek to reduce estimated benefits of regulations? As I see it, the agency faces a regulatory conundrum. President Trump issued an executive order in 2017, focused on the costs of regulations that required agencies to eliminate two rules for every new rule they issue. Since regulations have benefits as well as costs, if an existing rule delivers more benefits than costs, then striking it would impose net harm on the public.
For example, Pruitt is seeking to roll back three Obama administration air pollution initiatives: the Clean Power Plan, which limits greenhouse gas emissions from power plants, and combined carbon emission and fuel economy standards for light-duty vehicles and heavy-duty vehicles. Halting these rules would save money for some electric utilities and vehicle manufacturers, but would also greatly increase air pollution.
Specifically, one recent analysis estimates that eliminating these rules would increase premature deaths from inhaling fine particulate matter by more than 80,000 over a decade. In today's dollars, and using the current value EPA employs to monetize mortality risk reduction, public health costs from reversing these three rules amount to nearly $75 billion per year—far more than any potential benefits to industry.
Even for an administration with a strong deregulatory tilt, such a step would raise political red flags. It also would run afoul of another executive order that has governed regulatory review in Democratic and Republican administrations since 1993, and requires agencies to issue rules if their benefits justify the costs. The Obama administration concluded that each of these air pollution regulations passed that test.
But what if the EPA can find a way to ignore major categories of benefits, such as zeroing out estimated co-benefits from reducing premature deaths? Then regulatory rollback could appear to pass a cost-benefit test on paper, even if it makes the American people worse off in the real world.
Pruitt has already taken other steps in this direction. Notably, the EPA has reduced its estimate of the damages from climate change from $42 per ton of carbon pollution at the end of the Obama administration to as low as $1 per ton now. This makes the social benefit of actions that reduce greenhouse gas emissions, such as the Clean Power Plan, look much smaller than they actually are.
EPA Administrator William Reilly, left, watches as President George H.W. Bush signs the Clean Air Act Amendments, November 15, 1990.USEPA archive / Carol T. Powers
Gaming the Numbers
The late Nobel laureate Gary Becker, who often called for limited government intervention in the economy, once wrote that "cost-benefit analysis may also be useful for undermining misleading claims of self-interested political pressure groups." By this he meant that rigorous, transparent assessment of a regulation's social benefits and costs makes it politically hard for special interests such as the coal industry to hijack the rule-making process.
Some conservative critics argue that under the Obama administration, the EPA gamed cost-benefit analysis to justify overregulation by introducing what they describe as speculative "social costs" and "social benefits." But this approach is not new or imprecise. When regulators do cost-benefit analysis, they are calculating the net change in "social welfare" that a regulation is expected to produce. This term comes from the White House guidance to agencies for conducting such analysis. Economists define social welfare as social benefits minus social costs.
The EPA used this process during the Reagan administration to show that the public would benefit from reducing lead in gasoline. Under President George H.W. Bush, the EPA's cost-benefit analysis supported phasing out chlorofluorocarbons that were destroying the ozone layer. Cost-benefit analysis has also supported hundreds of other EPA regulations over more than 30 years.
Indeed, transparent analysis of the social benefits and costs of regulations helps to hold regulators accountable. But if agencies put their thumbs on the scale by excluding major public health benefits, they will weaken the legitimacy of regulatory policy and make the American people worse off.
Pruitt Prepares Block on Scientific Studies That Protect Public Health https://t.co/iNkjBphJpB @ScienceNewsOrg @TheScienceGuy— EcoWatch (@EcoWatch)1524690033.0
Joseph Aldy is associate professor of public policy at Harvard University.
Disclosure statement: Joseph Aldy receives funding from the Alfred P. Sloan Foundation and the Administrative Conference of the United States. He is affiliated with Resources for the Future, the National Bureau of Economic Research and the Center for Strategic and International Studies.
Reposted with permission from our media associate The Conversation.
By Karen L. Smith-Janssen
Colette Pichon Battle gave a December 2019 TEDWomen Talk on the stark realities of climate change displacement, and people took notice. The video racked up a million views in about two weeks. The attorney, founder, and executive director of the Gulf Coast Center for Law & Policy (GCCLP) advocates for climate justice in communities of color. Confronted with evidence showing how her own South Louisiana coastal home of Bayou Liberty will be lost to flooding in coming years, the 2019 Obama Fellow dedicates herself to helping others still reeling from the impacts of Katrina face the heavy toll that climate change has taken—and will take—on their lives and homelands. Her work focuses on strengthening multiracial coalitions, advocating for federal, state, and local disaster mitigation measures, and redirecting resources toward Black communities across the Gulf South.
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By Stuart Braun
"These are not just wildfires, they are climate fires," Jay Inslee, Governor of Washington State, said as he stood amid the charred remains of the town of Malden west of Seattle earlier this month. "This is not an act of God," he added. "This has happened because we have changed the climate of the state of Washington in dramatic ways."
'These Aren't Wildfires'<p>Sam Ricketts, who led climate policy and strategy for Governor Jay Inslee's 2020 presidential campaign, tweeted on September 11 that "These aren't wildfires. These are #climatefires, driven by fossil fuel pollution."</p><p>"The rate and the strength and the devastation wrought by these disasters are fueled by climate change," Ricketts told DW of fires that have burnt well over 5 million acres across California, Oregon, Washington State, and into neighboring Idaho. </p><p>In a two-day period in early September, Ricketts notes that more of Washington State burned than in almost any entire fire season until now, apart from 2015. </p><p>California, meanwhile, was a tinderbox after its hottest summer on record, with temperatures in Death Valley reaching nearly 130 degrees Fahrenheit, according to the U.S. National Weather Service. It has been reported as the hottest temperature ever measured on Earth.</p>
<div id="29ad9" class="rm-shortcode" data-rm-shortcode-id="8346fe7350e1371d400097cd48bf45a2"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1306969603180879872" data-partner="rebelmouse"><div style="margin:1em 0">Drought-parched wetlands in South America have been burning for weeks. https://t.co/pjAKdFcKPg #Pantanal https://t.co/ImN2C5vwcp</div> — NASA Earth (@NASA Earth)<a href="https://twitter.com/NASAEarth/statuses/1306969603180879872">1600440810.0</a></blockquote></div><p>As evidenced by Australia's apocalyptic Black Summer of 2019-2020, fires are burning bigger and for longer, with new records set year-on-year. Right now, Brazil's vast and highly biodiverse Pantanal wetlands are suffering from catastrophic fires.</p>
#climatefires Started in Australia<p>Governor Inslee this month invoked the phrase climate fires for arguably the first time in the U.S., according to Ricketts.</p><p>But the term was also used as fires burnt out of control in Australia in late 2019. In the face of a 2000km (more than 1,200 miles) fire front, and government officials and media who <a href="https://www.dw.com/en/trump-climate-change-denial-emissions-environment-germany-fake-heartland-seibt/a-52688933" target="_blank">played down the link to climate change</a>, Greens Party Senator Sarah Hanson-Young and a friend decided that reference to bushfires was inadequate. </p><p>"We both just said, we've got to start calling them climate fires, that's what they are," the Australian Senator told DW.</p><p>Hanson-Young says scientists have been warning for decades that these would be the effects of global heating. "We've been told these kinds of extreme weather events and destruction is what climate change would look like, and it's right here on our doorstep," she said from her home state of South Australia — where by early September fire warnings had already been issued.</p><p>"Calling them climate fires was making it absolutely crystal clear. It is essential that there's no ambiguity," she said </p><p>Having deliberately invoked the term, Hanson-Young soon started to push it on social media via a #climatefires hashtag. </p>
How to Talk About the Urgency of Global Heating<p>The need to use more explicit language when talking about extreme weather events linked to climate change is part of a broader push to express the urgency of global heating. In 2019, activist Greta Thunberg tweeted that the term "climate change" did not reflect the seriousness of the situation. </p><p>"Can we all now please stop saying 'climate change' and instead call it what it is: climate breakdown, climate crisis, climate emergency, ecological breakdown, ecological crisis and ecological emergency?" she wrote. </p><p>"Climate change has for a long time been talked about as something that is a danger in the future," said Hansen-Young. "But the consequences are already here. When people hear the word crisis, they understand that something has to happen, that action has to be taken."</p><p><span></span>Some terms are now used in public policy, with state and national governments, and indeed the EU Parliament, declaring an official climate emergency in the last year. </p>
Words That Reflect the Science<p>But while the West Coast governors all fervently link the fires to an unfolding climate crisis, U.S. President Donald Trump continues to avoid any reference to climate. In a briefing about the fires, he responded to overtures by Wade Crowfoot, California's Natural Resources Secretary, to work with the states on the climate crisis by stating: "It'll start getting cooler. You just watch." Crowfoot replied by saying that scientists disagreed. Trump rejoined with "I don't think science knows, actually." </p><p>It was reminiscent of the anti-science approach to the coronavirus pandemic within the Trump administration, <a href="https://www.dw.com/en/donald-trump-admits-playing-down-coronavirus-risks/a-54874350" target="_blank" rel="noopener noreferrer">at least publicly</a>. Fossil fuel companies are also benefiting from his disavowal of climate science, with the Trump administration having <a href="https://www.dw.com/en/opinion-trumps-paris-climate-accord-exit-isnt-really-a-problem/a-51124958" target="_blank" rel="noopener noreferrer">pulled out of the Paris Agreement</a> and reopened fossil fuel infrastructure like the Keystone XL pipeline. </p><p>But the science community has responded, with Scientific American magazine endorsing Trump's Democratic presidential challenger Joe Biden, the first presidential endorsement in its 175-year history. </p><p>Hanson-Young says the use of explicit language like climate fires has also been important in Australia due to the climate denialism of politicians and the press, especially in publications owned by Rupert Murdoch. As fires burnt out much of Australia's southeast coast, they were commonly blamed on arson — a tactic also recently used in the U.S.</p>
Climate Rhetoric Could Help Decide Election<p>The language of climate has begun to influence the U.S. presidential election campaign, with Democratic nominee Joe Biden labelling President Trump a "climate arsonist."</p><p>Biden is touting a robust climate plan that includes a 2050 zero emissions target and a return to the Paris Agreement. Though lacking the ambition of The New Green Deal, it has been front and center of his policy platform in recent days, at a time when five hurricanes are battering the U.S. Gulf Coast while smoke blanketing the West Coast spreads all the way to the East. </p><p>People are experiencing the climate crisis in a visceral way and almost universally relate to the language of an emergency, says Ricketts. "They know something is wrong."</p>
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