Coalition of Manufacturers and Trade Groups Call for Changes to EPA Cost-Benefit Analysis
Manufacturers from across the country today sent a joint letter urging for changes in how the Environmental Protection Agency uses cost-benefit analysis to implement regulations.
The letter, penned by the National Association of Manufacturers (NAM) and cosigned by more than 100 trade groups, was addressed to Office of Information and Regulatory Affairs Administrator Neomi Rao, part of the White House Office of Management and Budget.
“We believe the time has come for EPA to reexamine its statutory interpretations,” the organizations wrote Thursday. “Agencies must prepare cost-benefit analyses to support their most significant regulations, and to the extent permitted by law, not regulate unless the benefits justify the costs and the selected regulatory option maximizes net benefits to society.”
The trade groups—including the Colorado Association of Commerce and Industry, Independent Petroleum Association of America, National Mining Association, the American Farm Bureau and the State Chamber of Oklahoma—called on the EPA to emphasize transparency and make use of best available science.
“First, the regulatory process must be transparent and inclusive of public input. Second, agencies should use the best available science and should clearly identify areas in which meaningful uncertainties remain. Third, agencies should be accountable to Congress and the public for the quality of their rulemaking,” the note continued.
The letter comes in the wake of EPA’s recent Advance Notice of Proposed Rulemaking (ANPRM), issued on June 7. The ANPRM is asking for public input on the possibility of changing how costs and benefits are calculated by EPA when considering the merits of proposed regulations.
“Many have complained that the previous administration inflated the benefits and underestimated the costs of its regulations through questionable cost-benefit analysis,” said EPA Administrator Scott Pruitt. “This action is the next step toward providing clarity and real-world accuracy with respect to the impact of the Agency’s decisions on the economy and the regulated community.”
EPA says changes will bring more consistency to the process, pointing out that EPA statutes require the agency to consider “costs” but that those costs have been interpreted differently by different administrations.
“This has led to EPA choosing different standards under the same provision of the statute, the regulatory community not being able to rely on consistent application of the statute, and EPA developing internal policies on the consideration of costs through non-transparent actions,” the agency wrote.
The Wall Street Journal endorsed the proposed changes in a recent house editorial, emphasizing the uncertainty that inconsistent calculations can impose on the economy. “The reform would make it easier for Americans and their elected representatives to see whether more regulation is truly justifiable,” wrote the editorial board.
Sen. John Barasso (R-Wyo.), who chairs the Environment and Public Works (EPW) Committee, also expressed support for the ANPRM.
“During the Obama administration, the Environmental Protection Agency exaggerated the benefits of Washington regulations and misjudged how costly they are to the economy,” said Barrasso. “Punishing regulations like the so-called ‘Clean Power Plan’ would have cost Wyoming’s energy workers their jobs and devastated communities throughout the state. Now the Trump administration is taking important steps to make sure the agency can no longer abuse the cost-benefit analysis process.”
The announcement drew criticism from environmental and public health organizations, who claim the proposal will undermine the justification for regulations.
“They seem to be mostly concerned about cost estimates and also, I think, trying to diminish benefits estimates,” said American Lung Association Senior Vice President Paul Billings, according to E&E News.
But the proposal was cheered by business groups, who say establishing clear rules will more accurately determine whether a proposed rule is worth the cost.
“We applaud this important EPA initiative to strongly embrace this longstanding, bipartisan principle when interpreting and implementing its regulatory statutes,” said Donna Harman, president of the American Forest & Paper Association, in a statement. “Common-sense regulatory policy that ensures regulations do more good than harm will strengthen the foundation for growing our economy while protecting the environment and creating opportunities for all Americans, now and in the future.”
Regulatory reform has been a point of emphasis for Pruitt since he took the helm of the EPA.
One initiative championed by Pruitt is the idea of ending the use of “secret science” and increasing the transparency of how data and methodology is pursued or analyzed by third party researchers. In March, Pruitt announced that EPA regulators would no longer consider studies that don’t make their data public, while EPA-funded studies will be required to meet that same standard.
The EPA estimates that, within the past year, the agency has saved Americans more than $1 billion by reducing regulatory costs.