Understanding EPA’s fuzzy math

Sometimes numbers do lie. A little-noticed move by the Trump/Wheeler Environmental Protection Agency (EPA) suggests we may see more cooking of the books to justify going easier on polluters. On August 13, the agency completed the first step of a rulemaking that would further rig its cost-benefit-analysis methods for divining the economic impacts of proposed regulations. Its apparent goal is to put an industry-friendly thumb on the EPA’s cost-benefit analysis scale by prioritizing profits ahead of the public interest and by selling short regulatory benefits.

Even when attempted in good faith, cost-benefit analysis is a poor fit for environmental and public health safeguards. As a theoretical matter, it assumes that children who want to play outside without suffering asthma attacks have no stronger moral claim to clean air than industries that want to profit from polluting. As a practical matter, the goals of EPA regulations — things like averting cancers or protecting ecologically important fish species — are rarely amenable to either quantification or monetization.

{mosads}But cost-benefit analysis is rarely attempted in good faith. Too much is at stake in the numbers it produces.

Over the past 20 years, EPA has been receptive to adopting cost-benefit analysis tricks that skew results against safeguarding public health. In 2003, the agency decided to treat the value of the lives of seniors as significantly less than those of younger people. In its cost-benefit analysis for a rule to limit air pollution from cranes and other “off-road diesel” vehicles, EPA claimed the life of a person over age 70 was worth only 65 percent as much as the life of someone under 70. 

It’s easy to see why polluting industries would line up behind something like this “senior death discount:” It drastically diminished the benefits of EPA’s off-road diesel rule on paper, preventing the agency from imposing stronger controls on these air pollution sources. Only a loud public shaming persuaded EPA to abandon the practice.

Another morally dubious accounting practice continues to be used in EPA’s cost-benefit analyses: low-balling the value of children’s IQ points. Among the harms of toxic air pollution is that it can damage the still-developing brains of fetuses and children, causing measurable IQ loss.

In its cost-benefit analysis for a 2011 rule to limit mercury emissions from power plants, EPA managed to calculate the “value” of each saved IQ point down to the last dollar — $9,775, in fact — based on the expected increase in lifetime earning potential (as if that were the only “benefit” that IQ points carry). But it then reduced that amount by $1,762 to account for the extra “costs” a child burdened by those IQ points would likely incur by pursuing more post-high school education. 

By shrinking the benefits side of the ledger through this “education penalty,” polluters again come out as winners since the reduced values make it harder for the agency to justify stronger safeguards to protect children from mercury, lead, and other toxic pollutants.

The EPA’s benefits-busting proposal could invite more such accounting abuses. We’ve already seen EPA under Trump flagrantly cook the books to support its attempts to repeal the Waters of the United States rule and the Clean Power Plan — both rules that had been shown to have benefits that exceeded their costs. Making this kind of creative math official agency policy would help advance the rest of its rollback agenda.

It should come as no surprise that the proposal has an anti-safeguard motive. After all, the move was initiated by disgraced former EPA Administrator Scott Pruitt as part of his broader campaign to permanently cripple the agency so that even under a future administration determined to responsibly fulfill its public interest mission, the EPA wouldn’t be able to safeguard public health and the environment. This assault on public protections has also included stacking EPA’s expert advisory boards with industry representatives and a companion rule that would rig EPA’s use of science by arbitrarily disqualifying important scientific studies that have found evidence of harms from common pollutants and chemicals. 

Acting Administrator Andrew Wheeler now has the opportunity to distinguish himself from the scandalous and toxic legacy left by his predecessor, and he should take advantage of it by abandoning this misguided rulemaking.

Amy Sinden is James E. Beasley professor of Law at the Temple University Beasley School of Law in Philadelphia and a board member at the Center for Progressive Reform. James Goodwin is the senior policy analyst at the center. Both are experts in cost-benefit analysis.