Category Archives: Cost-Benefit Analysis

Each Federal Agency Should Use Its Judgment in Determining the Social Cost of Carbon — How’s That Going to Work Out?

Late last month, the Interagency Working Group on Social Cost of Greenhouse Gases quietly released a three-paragraph memo on how agencies should determine the social cost of greenhouse gas emissions.  I hesitate to call it “guidance.”  Here’s the operative language:

As agencies consider applying the SC-GHG in various contexts, agencies should use their professional judgment to determine which estimates of the SC-GHG reflect the best available evidence,… More

Biden Expands Consideration of Social Cost of Carbon by Federal Agencies

On September 21, 2023, the Biden administration outlined plans to expand federal agencies’ consideration of the social cost of carbon—a metric for the economic cost of each additional ton of carbon dioxide emitted to the atmosphere. This announcement tilts the balance of cost-benefit analyses in favor of activities that reduce greenhouse gas emissions, and it could have widespread effects for entities that receive federal funding or are subject to federal regulation.… More

The Social Cost of Greenhouse Gases Is Increasing — But Is Uncertainty Over the Measurement of Climate Impacts Artificially Depressing the Number?

Yesterday, Climatewire (subscription required) released a peer review letter on EPA’s Social Cost of Greenhouse Gases (SC-GHG), which got a fair bit of press last year, because EPA’s metric was $190/ton, even though the Biden administration was using the $51/ton figure originally developed by the Obama administration.  The peer reviewers’ views can be distilled down to two major points:social cost of greenhouse gases

  1. It’s a really solid piece of work that provide a solid technical foundation for the SC-GHG.…
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OMB Proposes to Revise Circular A-4; This is Not Trivial

On Thursday, the Office of Management and Budget released proposed revisions to “Circular A-4”.  It also released a separate preamble, explaining its thinking and asking for comment on certain identified issues.

Circular A-4 is almost certainly the most important document that most people have never heard of, since it governs how federal agencies conduct cost-benefit analysis of potential federal actions.  The proposal is not a massive rewrite of Circular A-4,… More

Red States Still Have Nothing to Complain About Regarding the Social Cost of Carbon

Today, the 5th Circuit Court of Appeals dismissed for lack of standing claims by a number of states challenging the Biden Administration’s Interim Estimates of the Social Cost of Carbon.  The Court had telegraphed this outcome last spring when it vacated a District Court injunction against use of the Interim Estimates, noting that:

The Government Defendants are likely to succeed on the merits because the Plaintiff States lack standing.… More

Can Cumulative Impact Analysis Improve Cost-Benefit Analysis?

As frequent readers know, I am a big fan of cost-benefit analysis.  The basic idea is that, when we make a decision to regulate at a certain level, we are by definition deciding that regulating to that level is “worth” the costs that the regulation will impose.  We might as well make such calculations explicitly. 

However, that doesn’t mean that CBA cannot consider the distributional impacts of federal regulations. … More

The Social Cost of Carbon Lives! The Red States Have Nothing To Complain About

The Fifth Circuit has stayed an order blocking Biden administration use of the “Interim Estimates” of the social cost of greenhouse gases.  The Court did not leave much doubt that the administration will prevail on the merits. 

Issuance of a stay is based on criteria very similar to those regarding entry of an injunction.  The two most important are the likelihood of success on the merits and whether the person requesting the stay will suffer irreparable harm if a stay is not granted. … More

It’s Still (Again) Necessary and Appropriate to Regulate Air Toxics From Power Plants

EPA has proposed to revoke the Trump administration finding in 2020 that it is not appropriate and necessary to regulate emissions of air toxics from coal- and oil-fired electric generating units.  Instead, EPA proposes to reaffirm its 2012 and 2016 determinations supporting such regulation. 

This is not surprising and should not be controversial.  It may seem odd that I’m citing to the Edison Electric Institute twice in one week in support of EPA regulatory authority,… More

The Internal Combustion Engine Is Bad For Your Health — What Should We Do About It?

I’ve written a lot about how the developing science around particulate exposure supports making the PM2.5 NAAQS more stringent.  So it won’t come as a surprise that a new study published in the Proceedings of the National Academy of Sciences indicates that the benefits of on-road emissions reductions from 2008 to 2017 could be measured in the hundreds of billions of dollars and almost 10,000 fewer deaths. … More

Will We Ever Stop Overestimating the Cost of Complying with Environmental Regulations?

Earlier this week, Greenwire (subscription required) had an interesting story about the role that EPA’s estimate of the cost to comply with the Mercury and Air Toxics Standards rule played in the politics and judicial review of the rule.  It turned out that compliance costs were much less than originally estimated by EPA – let alone by industry.  Unfortunately, the $9.6 billion price tag originally put on the MATS rule lived on,… More

EPA Will Reconsider the Ozone NAAQS — What Is An Adequate Margin of Safety, Anyway?

On Friday, EPA announced that it was reconsidering its 2020 decision to leave the National Ambient Air Quality Standards for ozone unchanged.  The reconsideration will be based on the existing record.  The notice does not identify any specific perceived flaws in the 2020 decision.  However, EPA stated that it:

will reconsider the decision to retain the ozone NAAQS in a manner that adheres to rigorous standards of scientific integrity.… More

Does Pollution Make You Dumber? (And Other Questions About Exposure to Particulate Matter.)

Most people other than Andrew Wheeler and the Trump Administration Clean Air Science Advisory Committee know that exposure even to low levels of PM2.5 causes increased morbidity and mortality.  And now comes evidence that exposure to PM2.5 may adversely impact cognitive capacity as well.  If the evidence is correct, then the externalities created by activities that release PM2.5 are likely much more significant than we had realized,… More

The Test For Injunctive Relief Was Not Developed By a Risk Assessor

Earlier this Month, Judge James Boasberg, who had previously ruled that the easement allowing construction of the Dakota Access Pipeline must be vacated due to a failure to comply with NEPA, nonetheless declined to issue an injunction requiring that the pipeline cease operations.  The Court’s rationale was clear and straightforward.  The Court of Appeals ruled that Judge Boasberg could not enjoin use of the pipeline without finding that all elements of the four-factor test for an injunction had been met. … More

Incidental Take Permits Under the Migratory Bird Treat Act — Why Is This So Difficult?

Last week, the Fish and Wildlife Service issued a proposed rule that would revoke the rule promulgated by the Trump Administration in January 2021 and return to the prior status quo, in which the incidental take of birds subject to the Migratory Bird Treaty Act constituted a violation of the Act.  I’m not taking a position on the proposal.  I don’t think it’s as clear-cut as my friends in the environmental movement seem to believe. … More

PM2.5 and Environmental Justice — and Electric Vehicles– and Tires

I’ve frequently discussed in recent years the mounting evidence for the need to lower the National Ambient Air Quality Standard for PM2.5.  There is also substantial evidence that PM exposure is an environmental justice issue.  In this context, electrification of our transportation system is seen as having a substantial co-benefit in the reduction of vehicle-related PM emissions, particularly in EJ communities. 

Two recent stories both confirmed the validity of these issues and made manifest the complexity of the problems we are trying to solve. … More

Cost-Benefit Analysis Is Very Complicated — And Very Important

It’s only a slight rhetorical exaggeration to say that the limited bandwidth left to environmental issues other than climate change in recent years has been largely occupied by concerns about PFAS – Per-and polyfluoroalkyl substances, also known as “Forever chemicals.”  A fascinating story in Bloomberg Environment & Energy (subscription required) this week suggests that we may need a little more bandwidth for PFAS.

The Bloomberg story explained that fluoropolymers are integral to the rollout of 5G networks and are also critical to a number of advanced technologies,… More

It’s the Externalities, Stupid — Climate Edition

Among the important provisions of President Biden’s Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis is the requirement to review and revise estimates of the social cost of carbon (and nitrous oxide and methane).  The order establishes a working group, co-chaired by the Chair of the Council of Economic Advisers, the Director of OMB, and the Director of the Office of Science and Technology Policy. … More

Massachusetts Starts 2021 With a Bang on Climate

Over the past four years, while the Trump Administration did everything possible to ignore climate change, optimists continued to find progress at the state level.  And while President-elect Biden has put together an A-team on climate, Massachusetts, at least, seems determined to show that the states will continue to lead – even if they now have a partner at the federal level.

Two weeks ago,… More

EPA Rolls Back Obama Methane Rules; I Coin a Phrase: “Regulatory Whiplash”

Last week, EPA finalized its rollback of Obama administration regulations governing methane emissions from the oil and gas industry.  The move is not exactly a surprise.  Regarding the purpose of the rollback, I stand by my take on the proposed regulations.  This regulation was promulgated for two purposes.  First, it provides generic red meat to those who think government regulation is inherently a bad thing. … More

EPA’s New Cost-Benefit Rule — Are Both Sides Misrepresenting What It Says?

Last week, EPA released its proposed rule regarding Increasing Consistency and Transparency in Considering Benefits and Costs in the Clean Air Act Rulemaking ProcessAs much as I hate to give aid and comfort to this Administration, I have to say that the rule does not herald the end of western civilization.  The biggest controversy surrounding the rule is its impact on consideration of “co-benefits”. … More

EPA’s MACT Rule; Some Benefits Are More Equal Than Others

Last week, EPA formally revised the cost-benefit analysis for its rule limiting the emissions of hazardous air pollutants from coal-fired power plants.  The rule jettisons consideration of so-called “co-benefits,” in this case, the benefits from the reduction in emissions of PM2.5 that result from limits on mercury emissions.  The very idea of excluding consideration of co-benefits is just plain incoherent.

I’ve spent my career defending cost-benefit analysis to many of my environmentalist friends. … More

EPA and NHTSA Release the SAFE Rule — Don’t You Feel Safer?

EPA and the NHTSA have finally released Part 2 of the Safer Affordable Fuel-Efficient (SAFE) Vehicle Rule.  Most readers will know that Part 1 of the SAFE rule revoked California’s waiver authorizing it to impose more stringent mileage standards.  Part 2 substantially rolls back the federal fuel-efficiency standards promulgated by the Obama Administration.

I referred to George Orwell on this blog as recently as January,… More

Balancing Environmental Protection and Public Health in the time of COVID-19 (and after)

Greenwire reported today that two medical sterilization facilities in Georgia that had been shut down or had production limited due to concerns about exposures to ethylene oxide would be allowed to increase operations in response to the need for sterilized medical equipment to address the COVID-19 pandemic.  The result is not surprising and, one assumes, appropriate in the circumstances.

It does highlight, though,… More

A Court Enjoins Implementation of NH DES PFAS Regulations — Almost!

Last week, Judge Richard McNamara ruled that the plaintiffs were likely to succeed in their challenge to the very stringent standards for PFAS in drinking water promulgated by the New Hampshire Department of Environmental Services.  However, given the importance of the issues, the Court stayed its injunction until December 31, to give the parties time to appeal to the NH Supreme Court.

The Court ruled against the plaintiffs’ claims that the regulations constituted an unfunded mandate and that DES failed to give fair notice and an opportunity to comment on the regulations (DES’s final regulations were substantially more stringent than its proposed regulations). … More

Good Neighbors Delayed Are Good Neighbors Denied

Last Friday, the D.C. Circuit Court of Appeals ruled that EPA violated the Clean Air Act in failing to impose deadlines on upwind states violating the CAA’s Good Neighbor provisions.  The Court concluded that, where downwind states face significant consequences in not meeting statutory deadlines to attain National Ambient Air Quality Standards, but don’t control their own fate because upwind states are contributing significantly to the downwind states’ nonattainment,… More

Heads Trump Wins; Tails Regulation Loses

Earlier this week, the Department of Energy withdrew definitions of “general service lamps” and “general service incandescent lamps” promulgated under the Obama administration.  The effect is to eliminate requirements that such lamps move to more energy-efficient bulbs.  Examples include recessed fixtures, referred to, at least in my house, as “cans,” and chandeliers.

On this one, I’ll leave the legal issues to others.  To me, the noteworthy aspect was that DOE is defending the rule,… More

EPA Proposes to Eliminate Oil and Gas Methane Rules: Just Another Brick in the Deregulatory Wall

Last week, EPA proposed to eliminate regulation of methane emissions from the oil and gas industry.  The most noteworthy response to the proposal came from the large producers.  ExxonMobil, Shell, and BP all oppose the rollback.  In fact, Shell went on record not that long ago requesting the EPA increase the stringency of oil and gas methane regulation.  Anyone else hear an echo of the large automakers’ response to the Administration’s efforts to relax fuel efficiency standards?… More

The Office of Surface Mining Loses Another NEPA Case — Do I Detect a Trend?

Last week, a federal judge once more rejected the Environmental Assessment for the expansion of the Spring Creek Mine in Montana.  The case does not really break any new ground, but it does add to the growing number of cases in which courts have rejected federal action approving a variety of large facilities related to energy production in one way or another.  The crux of this case was the failure of the EA to consider downstream,… More

EPA’s New Approach to Cost Benefit Analysis: Charles Dickens or Alice in Wonderland?

I’ve only now had the opportunity to catch up with EPA’s proposed reconsideration of its approach to cost-benefit analysis for the Mercury and Air Toxics Standards.  I don’t know whether I’ve gone down a rabbit hole or it’s just that the law is an ass.  Either way, it’s not good news.

As far as I can tell, EPA today does not really challenge the analysis performed in 2016 in response to Michigan v.… More

Score One For Rational Regulation: The 2nd Circuit Rejects Environmental and Industry Challenges to EPA’s Cooling Water Intake Structure Rule

On Monday, the 2nd Circuit Court of Appeals rejected all challenges to EPA’s cooling water intake structure rule.  Notwithstanding the Court’s rejection of the industry challenges, it’s a big win for industry.  As I noted when the rule was promulgated, industry dodged a major bullet when EPA decided not to require closed-cycle cooling at existing facilities.

The decision is really all about Chevron deference and is another bit of evidence in support of my ongoing effort to demonstrate that conservatives might want to be careful what they wish for when they discuss overruling Chevron.… More

OMB Reports that the Benefits of Regulation Exceed the Costs. The President Knows that Can’t Be Right

Late last month, to no fanfare whatsoever, OMB released its annual report on the costs and benefits of federal regulations.  There’s a reason that the Administration did not give the report any attention.  The report states that, for the 10-year period ending September 30, 2016, the benefits of major Federal regulations ranged from $219 billion and $695 billion, while the costs ranged between $59 billion and $88 billion. … More

It’s the Externalities, Stupid.

Last week, the Lancet Commission on pollution and public health (free registration required) released a study on the annual costs of pollution.  There’s bound to be argument about the specifics, but it’s difficult to argue with the conclusion that those costs are really, really, big.  The study estimates the annual global welfare loss due to pollution at $4 trillion – $6 trillion.  The Lancet says that this is more than 6% of global economic output. … More

Court Rejects BLM’s Efforts to Unbalance the Scales of Justice

Yesterday, Magistrate Judge Elizabeth Laporte granted summary judgment to plaintiffs and vacated the Bureau of Land Management’s notice that it was postponing certain compliance dates contained in the Obama BLM rule governing methane emissions on federal lands.  If you’re a DOJ lawyer, it’s pretty clear your case is a dog when the Court enters summary judgment against you before you’ve even answered the complaint.

The case is pretty simple and the outcome should not be a surprise. … More

Trump’s 2-For-1 Order: Still Arbitrary and Capricious After All These Months

In June, I posted about Foley’s brief in support of those challenging Executive Order 13771, the so-called “2 for 1” EO.  By ignoring the benefits of existing and proposed regulations, the Order ignores the purposes behind the legislation pursuant to which regulations are promulgated.  The Order is thus the definition of arbitrary and capricious.

Late last week, OMB issued a memorandum to executive agencies,… More

The Latest Executive Order: Any Kind of Consistency Is the Hobgoblin of Little Minds

Make no mistake, the Executive Order signed by President Trump at EPA yesterday is a big deal.  Time will tell whether the Administration’s U-turn on the Obama rules currently in litigation, such as the Clean Power Plan and the rule on fracking on federal lands will make any difference to judicial review of those rules.  There are plenty of states and NGOs ready to step into EPA’s and BLM’s shoes to defend those rules.… More

EPA Surrenders in the Regional Haze Dispute With Texas

As I noted when the 5th Circuit Court of Appeals stayed EPA’s disapproval of Texas’s regional haze regional-haze-2plan, EPA had pretty much no chance of winning. Although the parties then stayed the litigation to talk settlement, EPA announced yesterday that it was seeking a voluntary remand of the final rule. You don’t have to be privy to any confidential information to draw the conclusion that a certain election on November 8 rather drastically reduced EPA’s leverage in those negotiations.… More

The Social Cost of Carbon Passes Its First Judicial Test

Earlier this week, the 7th Circuit affirmed the Department of Energy’s new energy efficiency requirements for commercial refrigeration equipment.  This is a big deal in its own right, simply because the numbers are really large – according to DOE, the rule will save 2.89 quadrillion BTUs over the lifetime of equipment purchased under the rule.  It’s a reminder that energy efficiency remains a key to reducing carbon emissions.… More

Stop the Presses! EPA Still Thinks that the MATS Rule Is a Good Idea

Last week, EPA issued its “Supplemental Finding”, confirming that it still believes that its Mercury and Air Toxics Standards matsare “appropriate and necessary.”  I don’t have much to add to our post at the time of the proposed Supplemental Finding.  In short, the Supplemental Finding isn’t going to change anyone’s mind, but it should be sufficient to withstand judicial review as long as the courts still believe in Chevron deference.… More

MATS, Take Two: EPA Still Supports the Rule (And EPA Is Correct)

Late last week, EPA issued a Supplemental Finding, concluding that it is still “appropriate and necessary” to regulate hazardous air pollutants from coal- and oil-fired electric generating units.  The Supplemental Finding was necessary after the Supreme Court ruled earlier this year that EPA’s original decision to regulate HAP emissions from EGUs was flawed because EPA did not consider costs in making the decision.  Is the Supplemental Finding enough to ensure that the Mercury and Air Toxics rule mercuryis upheld this time around?  … More

The Earth Once More Spins Calmly On Its Axis; EPA’s Updated Hex Chrome MACT Rule Is Affirmed

On Tuesday, the D.C. Circuit Court of Appeals affirmed EPA’s update of its hexavalent chromium Hex chromeMACT rule.  Suffice it to say that this was a little easier than review of the power plant MACT rule.

The Court rejected both industry and environmental group challenges, in what was largely a straightforward application of Chevron.  The opinion is nonetheless useful in laying out what EPA must have in the record to justify ratcheting down MACT standards.… More

Here’s Another Nice Mess: Executive Order 562 Claims Its First Victim

Last Friday, I posted about Governor Baker’s Executive Order 562, which requires cost-benefit analysis, cost effectiveness analysis – and more – before state agencies can promulgate regulations.  It took less than a week before it became clear that EO 562 has real teeth.  Yesterday, MassDEP sent out a one-paragraph notice delaying hearings on its proposed Clean Energy Standard, citing EO 562 as the reason:

MassDEP is postponing the hearings and comment period on the proposed Clean Energy Standard rule until it has completed the reviews required under the recent Executive Order 562.… More

There’s Undoubtedly A New Sheriff in Town in Massachusetts

I have never agreed with those in the environmental community who are opposed to cost-benefit and cost-effectiveness analysis.  Cost-effectiveness analysis just seems a no-brainer to me.  As to cost-benefit analysis, we do it implicitly every time we write a regulation, and I don’t understand the unwillingness to do so explicitly.

All of which serves as burying the lede to Executive Order 562, issued by Governor Baker governor-charlie-baker-300x450this week.  … More

EPA Promulgates Final Cooling Water Intake Rule: Much Ado About Not Very Much?

On Monday, EPA finally announced promulgation of its long-awaited rule governing cooling water intake structures at existing facilities. The rule is certainly important, but it’s not earthshattering and it may be more significant for what it does not do than for what it does.

What does it do?

• Facilities that withdraw at least 2MGD must reduce impingement based on a finding that use of modified traveling screens with fish returns constitutes the best technology available (BTA).… More

The Wind Bloweth Where It Listeth — And the Supreme Court Says EPA Therefore Has Discretion in Regulating Wind-Borne Pollution

The Supreme Court today reversed the D.C. Circuit and affirmed EPA’s Transport Rule (known more formally as the Cross-State Air Pollution Rule). Whatever the hopes and dreams of the upwind states and the industry opponents, the decision does not surprise me. EPA pretty much did what it was told when the Bush era CAIR rule was struck down. Moreover, EPA crafted a rule that seems to me fully within its discretion under the Clean Air Act and which,… More

D.C. Circuit Affirms EPA’s Utility Air Toxics Rule: An “Appropriate” Rule Need Not Be Justified By Cost-Benefit Analysis

Yesterday, the D.C. Circuit Court of Appeals affirmed EPA’s rule setting limits for emissions of mercury and other air toxics from fossil-fuel-fired electric steam generating units.  The focus of the decision – and the issue on which Judge Kavanaugh dissented – was whether EPA was required to consider the costs that would be imposed by the rule.  EPA said no and the majority agreed.

Section 112(n) of the Clean Air Act required EPA to perform a study of the health hazards related to hazardous emissions from EGUs prior to regulating them. … More

The Real Risk of Unregulated Air Pollution

Sometimes the most valuable research turns out to be a confirmation of the obvious.   Fitting that bill is the study released yesterday in the Proceedings of the National Academy of Science documenting the substantially decreased life expectancy among people in China living in areas where coal has for many decades been used to heat homes.   The study is based on a long-standing policy in China of distributing coal free to residents who live north of the Huai River but not to people living south of the river. … More

CZM Proposes Regulations to Implement Ocean Management Plan and Update Federal Consistency Review Program

The Massachusetts Office of Coastal Zone Management (CZM) recently released for public review and comment draft regulations designed to update federal consistency review requirements and implement the state’s Ocean Management Plan.

Governor Patrick signed the Oceans Act on May 28, 2008, requiring the Secretary of EOEEA to develop a comprehensive ocean management plan.  The Massachusetts Ocean Management Plan was released on December 31, 2009. … More