June 5, 2020
EPA Proposes Benefit-Cost Analysis Rule
The Environmental Protection Agency recently proposed a rule that for the first time codifies how the agency conducts benefit-cost analysis (BCA) on significant Clean Air Act (CAA) rules. This proposed rule would help to ensure that BCA principles are applied to each significant CAA rule consistently and addresses the use of co-benefits and double counting, notes AAF’s Director of Regulatory Policy Dan Bosch. By codifying the BCA process, the Trump Administration’s EPA is aiming to make these principles long-lasting, he writes.
The proposed rule would help standardize EPA’s BCA process, which will improve its transparency and the public’s ability to understand how benefits and costs estimates are derived. Its effect on co-benefits and double counting of benefits will be the most impactful, as that will require the agency to demonstrate that the costs of regulating a specific pollutant are outweighed by the benefits of removing that pollutant.
The question for some will be why EPA should codify these principles in its regulatory code. The answer is that by promulgating a rule these principles will be longer lasting. In order to remove the rule, a future EPA would have to go through the time-consuming rulemaking process to alter it. Of course, that all depends on whether the Trump Administration is able to finalize it while still in office.