Environmental Economics

RFF: "Questions about the Trump Administration’s Cost-Benefit Analysis for its Proposal to Freeze the CAFE Standards"

Alan J. Krupnick, Joshua Linn, and Virginia McConnell:

In April, we wrote a blog post responding to the Trump administration’s announcement that it was preparing to weaken the fuel economy and greenhouse gas (GHG) standards hammered out in 2011 by the Obama administration. We argued then that although some things have changed since those vehicle rules were established, the agencies should not simply roll back standards, but pursue a strategy to ensure steady long-term reductions in passenger vehicle GHG emissions to address the threat of global climate change.

Now, the Trump administration is proposing to freeze the fuel economy and GHG standards at model year (MY) 2020 levels until MY 2026 (the standards are set based on model years, which typically begin in the Fall of the preceding calendar year). This is an abrupt change from the Obama standards, which would have continued reducing emissions. Given current policies, this change would increase greenhouse gas emissions during that period and beyond. Fuel economy regulations were first established to reduce fuel use for more energy security (this rule would increase fuel use in new cars) and then concerns about climate change became an additional consideration (this rule would increase GHG emissions). The Trump administration downplays the GHG benefits of the Obama standards and claims that those standards would increase traffic accidents.

We will issue a series of blog posts discussing various aspects of the new proposal and the cost-benefit analyses underlying it. ...

The National Highway Traffic Safety Administration (NHTSA) is conducting the benefit-cost analysis instead of the Environmental Protection Agency:

The Trump administration’s modeling, inputs, and underlying assumptions behind the analysis of this new rule are quite different from those behind the analysis of the earlier rule finalized in January of 2017 at the end of the Obama administration. EPA models, assumptions, and focus on greenhouse gas emissions reductions tended to dominate the earlier analysis of the proposed rules for 2021 to 2025 MYs. The current proposed rule under the Trump administration uses models developed by National Highway Traffic Safety Administration (NHTSA) to evaluate benefits and costs. The NHTSA analysis emphasizes the effect of the new rule on fuel use, vehicle miles traveled, and accidents by the entire fleet. The effort to set standards for vehicles has always been plagued by the problem of having two masters—improving fuel economy on the one hand and reducing GHG emissions on the other. The two are closely linked, but the agencies that regulate them have different jurisdictional authority and perspectives. What is needed is a unified effort to address the societal costs of consuming fuel with clear goals and consistent modeling and analysis.

To its credit, NHTSA attempts to expand the scope of the benefit-cost analysis, which could improve the accuracy of the evaluation. For example, NHTSA has introduced a dynamic stock model that includes effects of the rule not just on new vehicle technologies and costs, but on the number of new and used vehicles predicted to be on the road and how much they are driven. The model also allows for variation in the mix of cars and light trucks in the fleet in response to changes in the rule.

The NHTSA is making stuff up:

However, while expanding the scope of the analysis is good in theory, in reality there are important questions about both the way the model is used and the underlying assumptions. For example, the analysis finds that in going from the Obama rule (stricter standards each year through MY 2025) to the Trump rule (no change in standards after 2020), the overall size of the vehicle fleet falls even though new vehicle prices are lower. On its face, this is inconsistent with economics. Further, NHTSA predicts that total vehicle miles travelled also falls during this period, appearing to assume that households choose how many miles to drive their vehicles independently of the number of vehicles they own. This assumption is also inconsistent with economics. The agency is arguing that looser standards decrease the size of the on-road fleet and decrease total driving. We’re not aware of any real-world evidence supporting this argument. These new elements of the model are key because they result in significant reductions in external costs (such as congestion) and increases in safety from the change in vehicle ages and decreased driving under the proposed new rule.

Costs of CAFE regulation are inflated:

In addition, changes in how and when new technologies are introduced may have a significant effect on estimates of total technology costs. In the current NHTSA analysis, the technology costs are predicted to be more than two times higher for the Obama standards than the Obama analysis predicted for its rule in 2016. However the per vehicle costs in the new assessment are only about 50 percent higher ($1300 vs. $1950 in 2016 dollars). The NHTSA analysis provides some explanations for why these per vehicle costs might be higher, but it is not clear why total technology costs would be so much higher. ...

And, it ain't over:

In future blogs we will address other topics related to the proposed freezing of the standards, such as the effect of gasoline prices on fuel economy standards, assumptions about greenhouse gas emissions and other air pollutants, and the possible use of a safety valve if there is concern over high costs of meeting the standards.

Here is the link: http://www.rff.org/blog/2018/questions-about-trump-administration-s-cost-benefit-analysis-its-proposal-freeze-cafe

What’s the value of a clean beach? Here’s how economists do the numbers

I was asked to write an article for The Conversation that explains how economists place values on environmental goods (with examples).  Here's what I came up with.   Apologies to all of those involved in the research if this comes across as self-promoting--the perils of writing with an editor.  All of the examples mentioned in the article were team efforts--most were not my idea--and I was a minor part of each team.  It takes a village, and every village needs an idiot.

Millions of Americans head outdoors in the summer, whether for a day at a nearby lake or a monthlong road trip. For environmental economists like me, decisions by vacationers and outdoor recreators offer clues to a challenging puzzle: estimating what environmental resources are worth.

In 1981 President Ronald Reagan issued an executive order that required federal agencies to weigh the costs and benefits of proposed major new regulations, and in most cases to adopt them only if the benefits to society outweighed the costs. Reagan’s order was intended to promote environmental improvements without overburdening economic growth.

Cost-benefit analysis has been so successful as a tool for policy analysis that every administration since Reagan has endorsed using it. However, it requires measuring benefits that are not “priced” in typical markets. Fortunately, putting a price on non-market environmental outcomes, such as safer drinking water and fewer deaths from exposure to dirty air, has proved to be possible, and highly valuable. These estimates help to make the case for actions such as cleaning up beaches and protecting scenic areas as parks. ...

Ohio waterways are 'distressed.' Economists can help.

Today, Ohio Governor John Kasich will issue an executive order asking the Ohio Soil and Water Conservation Commission to declare eight Ohio waterways 'distressed' due to high phosphorous levels (phosphorous is one of the primary ingredients in commercial fertilizer): 

Frustrated by lawmakers’ refusal to consider a bill to get tougher on sources of agricultural pollution feeding Lake Erie’s chronic toxic algae problem, Gov. John Kasich on Wednesday took matters into his own hands with an executive order.

“This is just requiring farmers to figure out a way to manage their land in a more effective and environmentally friendly way,” the Republican governor said. “I believe that farmers want to do that.”

Under the order, his administration will ask the Ohio Soil and Water Conservation Commission at its July 19 meeting to designate eight watersheds or portions of watersheds with high phosphorous levels within the Maumee River Basin as “distressed.”

That would trigger the writing of rules affecting all agricultural nutrient sources, including such things as storage, handling, and application of manure; erosion and sediment control from the land; and other agricultural practices. Civil penalties could apply for violations.

Phosphorous loadings into the Maumee river watershed are the primary cause of Harmful Algal Blooms (HABs) in the Western Lake Erie Basin.  HABs cause a variety of health and economic losses including contaminated drinking water, reduced recreational activities and decreases in local housing values.  Kasich's Executive Order, followed by the 'distressed' designation will broaden the set of tools available to policy makers to address the HAB issue in Ohio.  As part of a college-wide effort to document and consolidate Ohio State's research and outreach efforts in this area, a group of environmental and agricultural economists were asked to draft a section of a report on the Economics of Nutrient Reductions to Control Harmful Algal Blooms.  While the full report isn't quite ready for public consumption, I can highlight here a few of the main points from the economics section (really these are just the opening sentences to each paragraph):

• Numerous policies have been recommended to reduce agricultural nutrient emissions, ranging from purely voluntary efforts to strict regulations. 
• While purely voluntary programs may struggle to achieve widespread application of conservation practices, or even nutrient reduction, society has developed large-scale subsidy programs to encourage these practices through the Conservation Title of the Federal Farm Bill. 
• Regulatory programs are at the opposite end of the spectrum from voluntary subsidy programs. 
• There have been [few] efforts in Ohio to use market mechanisms to reduce agricultural nutrient emissions.
• Market mechanisms use economic incentives to encourage behavioral shifts among economic actors, such as farmers.  Market mechanisms include policy instruments like pollution taxes and tradable pollution permits.  Pollution taxes work by raising prices for polluting inputs or outputs, thus encouraging farmers to use or emit less of the input or output. Tradable pollution permits impose limits on emissions but then allow trading among the regulated sources to reduce the costs of meeting the targeted aggregate abatement level.

There's a lot more in the draft section about the types of ongoing research environmental economists are undertaking to estimate the benefits and costs of reducing HABs, and the types of market-based policies that can achieve the necessary reductions in phosphorous loadings.  But, the upshot is this: 

• Voluntary programs to reduce phosphorous loadings have been unsuccessful in reducing phosphorous loading to optimal levels. 
• Command-and-control type regulatory programs (everyone must do A, then B) may work, but are very costly to farmers and society. 
• Market-based mechanisms, like taxes, subsidies, and tradable emissions programs, designed correctly, can achieve optimal nutrient reductions AT A MUCH LOWER COST.

There's no silver bullet to solving this problem.  Hopefully, working together, we can solve the problem as painlessly as possible. Any solution is going to cost someone something, but not solving the problem will cost a lot more.

"Scott Pruitt is now waging a war on economics"

Rob Verchick ("a professor at Loyola University New Orleans College of Law and president of the Center for Progressive Reform in Washington. He served as deputy associate administrator for policy at the Environmental Protection Agency) in the LATimes:

As head of the Environmental Protection Agency, Scott Pruitt has wriggled from one colorful scandal to the next, using agency staff to help his wife land a Chick-fil-A franchise and enlisting members of his security detail to pick up his dry cleaning and search for his favorite moisturizer.

But these ethical breaches pale in comparison to the real scandal: Pruitt’s sustained effort to help polluting industries by hocking America’s natural environment and public health for a song.

His latest ploy is a proposal to change how the EPA calculates the costs and benefits of environmental regulations, a process that those industries have consistently criticized. In a notice inviting the public to comment on whether and how to change the cost-benefit analysis, released on June 7, Pruitt appears to be laying the groundwork for reforms that would allow the EPA to hide the real-world value of protections by downplaying or leaving out many of the benefits they provide.

Like Pruitt’s war on science, which culminated in a plan to ignore an entire category of scientific studies when measuring environmental risks, his war on economics could erode regulatory protections. If it moves forward, the scheme is likely to make it much easier to block new standards and endanger many of the ones we already have. The stakes could not be higher. We’re talking about air that’s clean enough to breathe and water that’s safe to drink.

As a former EPA official, I know the critical roles that science and economics play in shaping the agency’s decisions. To protect people and the environment, our laws direct the EPA to establish air and water standards that are within an adequate margin of safety and are, as the law stipulates, “economically achievable.”

To this end, the agency delves into complex questions of science, economics and technology to make sure that these standards satisfy all statutory requirements while being sensitive to needs of the regulated industry. On top of this, the White House requires the EPA and other agencies to lay out the economic costs and benefits of significant regulations to determine how they would affect the overall economy.

Every year, the evidence shows that environmental protections prevent thousands of premature deaths, thwart countless illnesses and save tens of billions of dollars. A comprehensive study conducted by the EPA in 2011 found that, from 1990 to 2020, the annual benefits of air pollution standards will have exceeded total costs by about 25 times. Even the Trump White House recently concluded that the economic benefits of all major regulations were several times higher than the total costs.

Environmental protection is a great deal for the American public, in other words. But Pruitt’s proposal seems intended to low-ball the benefits, making it easier to portray environmental rules as inefficient and unnecessary.

For instance, the proposal appears to be laying the groundwork for a rule that would disregard indirect benefits in the EPA’s economic assessments. An indirect benefit, sometimes called a “co-benefit,” is an added bonus that was not part of the primary motivation behind a measure.

Imagine that you, like Pruitt, are in the market for a good moisturizer to protect against dry skin. If the most effective moisturizer also has sunscreen and smells good, those are co-benefits. You’d be silly not to consider those pluses as part of the lotion’s value.

The EPA would be similarly foolish not to consider all of the good things that its policies produce. It’s important, for instance, to take into account that vehicle fuel-economy standards not only reduce carbon pollution but also save drivers up to $27 billion in gas each year. It’s also important to note that more efficient coal-fired power plants reduce not only mercury pollution but also the sulfur dioxide inhaled by asthmatic children.

Pruitt’s notice asks for input on whether to consider co-benefits and repeats the criticisms that industries have offered on the practice. Pruitt himself has repeatedly criticized consideration of co-benefits, which every previous White House since the Reagan administration had endorsed. ...

Americans have until July 13 to submit comments on Pruitt’s proposal to undermine cost-benefit analysis at the EPA. We should use the comment period to remind Pruitt that, as EPA administrator, he works for all of us, and that the value of our health and environment must not be discounted.

From the inbox:

I write to highlight the chance to comment on the EPA Proposed Rulemaking “Increasing Consistency and Transparency in Considering Costs and Benefits in Rule Making Process.” The window for comments goes through July 13 (it is possible that this will be extended).  My goal is simply to reduce transaction costs for those willing to bring their professional expertise to this issue.

The process is pretty straightforward:

1. Go to  https://www.regulations.gov/document?D=EPA-HQ-OA-2018-0107-0001 , this takes you to the Proposed Rulemaking document, also posted is the Federal Register content where you can read the complete announcement.
2. Click the link on the center right entitled “Comment Now”
3. Write your comments in the provided space or upload your separate document.
4. Click Submit

All comments become public record, you can see mine or any others who have posted on the website.

Please encourage others to share their professional views.  I firmly believe that the people of America are not best served by basing decisions about how to use benefit-cost analysis for decision making on popular opinion or the most outspoken stakeholders.

Insert commitment mechanism here:

I'll be posting my comments here soon (aka, before July 13). 

The benefits of environmental regulations cannot be simply willed away (and why I'm too slow to be an Ivy-Leaguer)

A couple of weeks ago, soon after EPA Administrator Pruitt's announcement to introduce a rule changing the role of cost-benefit analysis in design of environmental regulations, I wrote an op-ed and submitted it to the NYTimes for consideration.  They politely declined (by ignoring the submission) so I submitted it to the Washington Post.  They too, politely declined (by ignoring the submission).  Finally I sent it to The Conversation and they politely declined (for real this time), basically saying I was too slow and Joe Aldy beat me to it. 

D'Oh--damn Ivy-Leaguers.

So although this repeats a lot of what Joe said in his piece for The Conversation, here's my take on why reducing the role of cost-benefit analysis at the EPA is dangerous. 

In 1981, President Reagan signed Executive Order 12291 requiring both the costs and benefits of any new major regulation be considered prior to federal implementation.  For the decade prior to Executive Order 12291, federal and state environmental regulators struggled to find cost effective ways to implement environmental regulations imposed by the Clean Air and Clean Water Acts of the early 1970’s.  Unfunded mandates imposed on states resulted in inertia that saw few environmental improvements during the decade after the Clean Air and Clean Water Acts were passed, and regulatory stalemates were a regular occurrence due to the perceived high cost of implementation.  By requiring cost-benefit analysis, Reagan’s Executive Order promised to reduce the cost of regulation by selecting only those regulations that promised to provide benefits in excess of costs, thus promoting environmental improvements without over-burdening economic growth after the lean economic times of the 1970’s.

Those in favor of less costly regulation applauded the use of cost-benefit analysis for regulatory decisions.  As a 1981 story in the New York Times put it:

“Administration and business officials and others who applaud the President's decision say that the uniform application of cost-benefit analysis...will stem the tide of unnecessary regulation that they say have been a severe and growing burden to the nation’s economy. “

Opponents of Executive Order 12291 countered that the use of cost-benefit analysis was simply an end-around for those opposing environmental regulation, that putting ‘prices’ on environmental goods diminished the contribution of environmental goods to the collective good, and that comparisons based solely on dollars can be easily manipulated.  

Despite the objections, Executive Order 12291 was issued and cost-benefit analysis has become a standard tool for environmental policy analysis.  In fact, cost-benefit analysis has been so successful as a tool for policy analysis that every administration since Reagan has endorsed its use. 

Until now.

On June 7, EPA Administrator Scott Pruitt, announced the intent to introduce a new EPA rule for public comment addressing cost-benefit analysis that effectively suggests removing the measurement of many co-benefits in consideration of environmental regulations.  In a surprising bit of irony, Administrator Pruitt argues that the measurement of benefits in consideration of environmental regulations has resulted in the implementation of too many costly regulations that harm business and has hampered economic growth—the exact argument that Reagan-era administration and business officials used in favor of cost-benefit analysis in 1981. 

What has changed since 1981? The simplest answer is that economists who specialize in the measurement of the benefits of environmental improvements have clearly demonstrated that there are large and measurable benefits to society of improving environmental quality thus providing justification for economically defensible environmental regulations.

Post-executive order 12291, a burgeoning line of academic inquiry emerged for the measurement of the benefits of environmental regulations.  Putting benefits on equal footing with costs required the measurement of benefits that are not ‘priced’ in typical markets.  Assigning ‘prices’ to non-market environmental outcomes, like the benefits of improved drinking water quality, or the benefits of preventing early deaths from excessive exposure to dirty air proved to be a manageable task, and highly valuable.  By measuring the costs AND benefits of proposed regulations, federal agencies, like the EPA, were quickly able to implement low cost environmental regulations that yielded societal benefits that far exceeded the costs of implementation without stifling economic growth.  For example, in a 2005 retrospective assessment of the costs and benefits of the sulfur dioxide cap-and-trade program in the EPA’s Acid Rain Program implemented under Title IV of the 1990 Clean Air Act, economists found that the costs of sulfur dioxide reductions from coal-fired electricity generation were half of what was expected, and after including the health, recreation, and aesthetic benefits of reduced sulfur dioxide emissions, the benefits of those reductions exceeded the costs of the Acid Rain Program by a factor of 40!  

Since the environmental movement of the 1960’s and 1970’s, economists have largely come down in support of the use of efficient regulation, based on cost-benefit analysis, to address environmental concerns.  A 1990 survey of members of the American Economic Association found that 60% of economists surveyed disagree with the statement “Reducing the regulatory power of the Environmental Protection Agency (EPA) would improve the economic efficiency of the U.S. economy.”  Only 12% agreed with the statement.  These numbers remained largely unchanged when the survey was repeated in 2000.  A more recent survey of members of the Association of Environmental and Resource Economists found that 96% of those surveyed disagree with the statement that “Unregulated markets provide public goods in optimal quantities.”  This was the single statement that yielded the highest level of agreement among the economists surveyed—a group notorious for being unable to agree with each other.  In short, there is a surprising degree of agreement among economists that environmental regulation is not only good for the environment, but when designed properly is defensible on economic grounds and unlikely to limit economic growth. 

Contrary to early fears, putting a ‘price’ on the environment has encouraged decision makers to recognize the scarce nature of our natural capital.  Rather than reducing “all decisions to simple-minded weighing of dollars,” the pricing of nature has forced everyone to recognize that the alternative to pricing nature is assuming it is free to exploit.  Assigning dollar values to the benefits of our natural and environmental resources allows us to use the power of markets and economics to design policies and regulations that benefit all. 

The benefits of many environmental regulations and the resulting environmental improvements are large, demonstrable, and economically defensible and cannot be simply willed away.

"Why a minor change to how EPA makes rules could radically reduce environmental protection"

Joe 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, Environmental Protection Agency 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. ...

Read the rest here: https://theconversation.com/why-a-minor-change-to-how-epa-makes-rules-could-radically-reduce-environmental-protection-98042

 

At What Cost? Legislators come up with solutions to Harmful Algal Blooms. Environmental Economists come up with cheaper solutions.

The Legislature of the State of Ohio is currently considering legislation to reduce Phosphorous loadings into Lake Erie by 40%.  This is a good thing, as reducing Phosphorous going into Lake Erie will reduce the incidence and impact of Harmful Algal Blooms in the Western Lake Erie Basin.  

The proposed legislation establishes a Clean Lake 2020 plan that includes:

A significant new Clean Lake Capital Fund that may appropriate up to $100 million per year for five years for both Lake Erie algae reduction, and agricultural best practices.  Funding may include establishing facilities to improve manure application processes, projects to reduce open lake disposal of dredged materials, funds to local governments for water quality-based green infrastructure, water management projects to help reduce nutrient and sediment runoff impacting the lake and other strategies.

A new Soil and Water Support Fund, with some of the funding provided directly to soil and water conservation districts to assist farmers in soil testing, nutrient management plans, installing edge of field drainage devices, encouraging inserting of nutrients (subsurface placement), and agreed to conservation methods that may include riparian buffers, filter strips and cover crops.

To the casual observer, this all looks good.  The proposed bill has widespread support among agricultural groups, and local and state authorities. As one of the bill's sponsors notes:

“These are not brand new ideas, just a greater sense of urgency to implement them,” Arndt said.  “There appears to be widespread agreement with state officials, environmental and agriculture groups, tourism advocates and business leaders that many of these strategies will make a big difference.”

And he is right, these strategies could make a big difference. 

But as economists we are trained to ask, 'At what cost?' 

If you want to know what to think about the EPA's move to relax fuel economy standards ...

My knee jerk reaction was faux anger -- everything Pruitt seems to reek and the 2012 standards were supported by benefit-cost analysis (1, 2). But for some reason I decided to wait and see what someone who know more about this issue (i.e., someone at RFF) had to say. I'm glad I did as Virginia McConnell and Alan Krupnick wrote this on Friday (We Need to Take a Longer View of Fuel Economy Standards):

The announcement this week that the Trump administration is reopening the CAFE/GHG rules for light-duty vehicles was expected. The widely known stance of the administration on climate change, Environmental Protection Agency (EPA) Administrator Scott Pruitt's criticism of the Obama policy, and the dramatic reductions in oil imports (thereby diminishing the energy security rationale for fuel economy standards) all contributed to the reconsideration of the 2022-2025 model year standards. But what happens next is key for whether the Trump administration and the auto companies can be part of the solution for addressing long-term climate policy. ...

And if you want balance and benefit of the doubt that last sentence is it since it seems clear that the Trump administration does not want to be part of the solution for addressing long-term climate policy. They go on to describe problems with fuel economy standards and how they can be improved (more flexibility). A balanced view suggests that the current fuel economy standards can be improved.

Yet, I'm a little disappointed because they start from the presumption that technological standards are inevitable in the automobile sector. Maybe so but it is never a bad time to point out that, even with the built in flexibility, a higher gas tax would efficiently solve many of the problems with imposing fuel economy standards on the auto industry. Here is what I wrote back in 2011:

Note that fuel economy standards are not the most cost-effective way to cut emissions and reduce oil imports. Cap and trade and carbon tax policies could achieve the exact same environmental and national security goals at a lower cost. The reason is that economic incentive-based policies provide the signal (in the form of higher energy prices) to improve fuel economy and pursue other ways of reducing emissions. If the other ways are cheaper, consumers and firms will have incentives to go down those paths. It is a shame that the political system makes higher fuel economy standards more feasible to achieve.

Of course, my initial reaction was correct. The current EPA does not deserve the benefit of the doubt and this move is simply designed to weaken environmental regulations because there are regulatory costs that industry doesn't like (even if the costs are less than the benefits). There is no economic analysis involved this decision. This is a business decision.

(1) Here is the EPA announcement: GHG Emissions Standards for Cars and Light Trucks Should Be Revised.

(2) Background: Here is Joshua Linn and Alan Krupnik commenting after Pruitt's Congressional testimony before the inauguration: Fuel Economy Standards: Take the Time to Get It Right. 

This article at Vox summarizes everything that I've been trying to say at this blog for the past 10 years (and have been too apoplectic to say during the past year)

David Roberts:

President Donald Trump’s administration has been on a deregulatory bender, particularly when it comes to environmental regulations. As of January, the New York Times counted 67 environmental rules on the chopping block under Trump.

This is not one of Trump’s idiosyncrasies, though. His administration is more ham-handed and flagrant about it, but the antipathy it expresses toward federal regulation falls firmly within the GOP mainstream. Republicans have been complaining about “burdensome” and “job-killing” regulations for so long that their opposition to any particular health, safety, or environmental regulation is now just taken for granted.

For instance, why would the Environmental Protection Agency close a program investigating the effects of toxins on children’s health? Is there some evidence that the money is wasted or poorly spent? Why would the EPA allow more unregulated disposal of toxic coal ash? Don’t people in coal regions deserve clean air and water? Is there any reason to think coal ash is currently well-regulated?

These questions barely come up anymore. Republicans oppose regulations because they are regulations; it’s become reflexive, both for the party and for the media the covers them.

As it happens, though, we know something about the costs and benefits of federal regulations. In fact, Trump’s own administration, specifically the (nonpartisan, at least for now) White House Office of Management and Budget (OMB), just released its annual report on that very subject. (Hat tip to E&E.)

The report was released late on a Friday, with Congress out of session and multiple Trump scandals dominating the headlines. A cynical observer might conclude that the administration wanted the report to go unnoticed.

Why might that be? Well, in a nutshell, it shows that the GOP is wrong about regulations as a general matter and wrong about Obama’s regulations specifically. Those regulations had benefits far in excess of their costs, and they had no discernible effect on jobs or economic growth. ...

Keep reading here: https://www.vox.com/energy-and-environment/2018/3/6/17077330/trump-regulatory-agenda-omb

Here is the link to OMB's report: https://www.eenews.net/assets/2018/02/26/document_pm_01.pdf

My fear is that now that this is underway, any attempts to re-establish objectivity in benefit-cost analysis will be viewed as founded in political gamesmanship rather than objective economic analysis.

Anyone at EPA care to weigh in on the 'new' methods for benefit cost analysis?

I have spent my career developing (hopefully) objective methods for the valuation of environmental benefits and costs.  This is particularly troubling:

The Trump administration’s rollback of environmental regulations has received ample attention in the media. Unfortunately, all the coverage has done little to slow the campaign at the U.S. Environmental Protection Agency (EPA) and the Department of the Interior to relax critical protections and dismantle former President Obama’s environmental legacy. By one recent count, the Trump administration has overturned — or is in the process of overturning — 60 environmental rules.

Less well known is that in its rush to reverse Obama-era policies, Trump’s team is distorting the way that government agencies such as the EPA evaluate and justify regulations. Yet these distortions may end up emerging as an important part of legal strategies to challenge the Trump administration’s assault on environmental regulations and oversight.

To scrap major environmental regulations put in place by prior administrations or enact new rules, the EPA is required to perform cost-benefit analyses. This has been standard government procedure for decades. Under EPA Administrator Scott Pruitt, the response to the requirement has been unwavering: Exaggerate the costs of environmental regulations; downplay the ecological, financial, and health benefits; and come up with numbers that argue for diminishing the rules or abandoning them altogether. The Pruitt approach is now being applied to some of the Obama administration’s signature achievements, including strengthening the Clean Water Act and the imposition of emissions standards under the Clean Power Plan.

As part of the WOTUS rulemaking, Obama’s EPA released its required economic analysis and found that the anticipated benefits of about $450 million per year would exceed the annual compliance costs of nearly $300 million. The vast majority of benefits were those associated with protecting wetlands, including essential services such as flood control, water quality improvements, fish and wildlife habitat, groundwater recharge, and recreational opportunities.

Then in June 2017, the Trump administration’s proposal to rescind WOTUS included its own analysis, which came to the opposite conclusion about the benefits exceeding the costs. In the new analysis, the quantified benefits for the identical policy were estimated at only $50 million per year — a reduction of nearly 90 percent — while the costs remained the same.

What explains the discrepancy? The EPA under Pruitt’s leadership asserted, with surprisingly little justification, that the 10 studies used to estimate the range of benefits associated with wetlands protection were not recent enough to sufficiently reduce uncertainty. All of the studies were conducted between 1986 and 2000, and while there are well-established techniques to update the results of such studies, none were used, nor did there appear to be any effort to search for more recent studies. The result was simply to assign a value of $0 to the largest category of ecological benefits that had been valued by the same agency two years earlier at more $400 million per year. In effect, zeroing out these benefits made it a foregone conclusion that the rule would not pass a benefit-cost test.

Unfortunately we have now entered what I fear is a partisan cycle and politicization of objective economic analysis.  Until now, the EPA has done an admirable job of maintaining, at least, some semblance of objectivity. Sure, political appointees change policies and procedures, but with at least some level of continuity across new administrations.  Since Executive Order 12291 during the Reagan Administration, both Republican and Democratic Administrations have relied on objective benefit cost analyses as an input to the rule- and decision-making process.  Rarely have administrations so blatantly changed the methods to meet a political objective. 

Until now.  

My fear is that now that this is underway, any attempts to re-establish objectivity in benefit-cost analysis will be viewed as founded in political gamesmanship rather than objective economic analysis.