EPA to consider changing how it weighs costs, benefits of regulations

Environmental Protection Agency (EPA) Administrator Scott Pruitt is floating major changes to how the agency weighs the benefits and costs of regulations on air pollution and other subjects.

The EPA put out a formal notice Thursday that it is soliciting ideas for overhauling its regulatory cost-benefit analysis, heeding requests from industry groups who complained that the Obama administration improperly boosted the benefits and downplayed the costs of the agency’s rules.

{mosads}The initiative could have wide-ranging implications both for future regulatory actions and for rules already on the books, since the agency is specifically asking whether to reexamine existing rules with new standards.

Cost-benefit analysis is often legally required when an agency writes a regulation, and it can dictate whether the agency moves forward in implementing it or scraps it altogether.

But the exact process of cost-benefit analysis is mostly up to the wishes of the administration in charge at the time.

“Many have complained that the previous administration inflated the benefits and underestimated the costs of its regulations through questionable cost-benefit analysis,” Pruitt said in a statement.

“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.”

The plan comes as Pruitt is facing numerous controversies, including news this week that he tried to use his position to help his wife get a Chick-fil-A franchise and that he had an aide do personal tasks like trying to buy a used mattress from the Trump International Hotel.

Two close aides to Pruitt also announced their resignations this week.

While Thursday’s notice wasn’t a formal proposal — and any future policy change would require an extensive regulatory process — it did give hints to specific steps the EPA might take.

For example, the EPA criticized the use of “co-benefits” — benefits from reducing pollutants that aren’t being regulated in a specific rule — to justify regulations. Numerous Obama administration rules relied on reductions in particulate matter emissions, even when those emissions weren’t being regulated.

The EPA also criticized the Obama administration’s Social Cost of Carbon, an accounting mechanism that estimated that a ton of carbon dioxide emitted into the atmosphere costs society $36 for the purposes of cost-benefit analysis. The Trump administration reduced that to $5 per ton last year when it proposed repealing the Clean Power Plan.

Industry groups and Republicans cheered the move Thursday.

“We applaud this important EPA initiative to strongly embrace this longstanding, bipartisan principle when interpreting and implementing its regulatory statutes,” Donna Harman, president of the American Forest & Paper Association, said 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.”

Sen. John Barrasso (R-Wyo.), chairman of the Senate Environment and Public Works Committee, said the Obama administration “exaggerated” environmental benefits, and Pruitt’s actions would correct the problem.

“Punishing regulations like the so-called ‘Clean Power Plan’ would have cost Wyoming’s energy workers their jobs and devastated communities throughout the state,” he said. “Now the Trump administration is taking important steps to make sure the agency can no longer abuse the cost-benefit analysis process.”