The Regulatory Process Works: EPA Promulgates Revised Boiler Rules

As almost everyone knows by now, EPA finally issued its long-awaited final rule on Boilers, Commercial and Industrial Solid Waste Incinerators (CISWI), and Sewage Sludge Incinerators (SSI) yesterday. The rule is too complicated even to summarize here. EPA has a useful fact sheet for that purpose.

I’d like to focus on a few broader issues. The rule has widely been seen as the Obama administration’s first formal acknowledgment of the anti-regulation political climate currently sweeping Washington. Indeed, the Times began its story as follows:

Responding to a changed political climate and a court-ordered deadline, the Obama administration issued significantly revised new air pollution rules on Wednesday that will make it easier for operators of thousands of industrial boilers and incinerators to meet federal air quality standards.

It’s not obvious to me that the instant punditry analysis is correct. EPA had received an enormous number of comments on the rule prior to the November elections. The regulated community had made a fairly strong case that the proposed standards simply couldn’t be met. EPA faced a real possibility of losing in court if it went forward with the proposed rule. Only time will tell if EPA has truly developed a new-found concern for the economic impacts of its rules.

Regardless of the reason for EPA’s change of heart, I think it is fair to say that the rule represents a triumph of the rule-making process. EPA issued a proposed rule, took thousands of comments, and – whatever its motivation – changed the rule in response to the comments, making compliance significantly less costly, while still achieving most of the benefits of the original proposal. 

The boiler rule was never one that could have been issued as guidance – it was statutorily mandated, for one thing – but I think that the boiler rule still provides a stark contrast with agency development of guidance. Guidance is not subject to the formal notice and comment process. Moreover, even where agencies do take comment on guidance documents, the very flexibility guidance supposedly provides makes agencies less responsive to comments. They can always say that the guidance will be interpreted flexibly in light of adverse comments.

Finally, to the extent that the economic concerns were part of EPA’s motivation, I can only say, hurray! Not simply because EPA considered the cost of the rule, but because EPA considered the cost-effectiveness of the rule. EPA can almost always generate an analysis demonstrating that the benefits of a rule exceed its costs, but that’s not really the proper criterion. If EPA could obtain 90% of the benefits of a rule with an alternative rule that would impose only 10% of the costs, I would vote for the alternative rule. If the boiler rule represents one small step towards increased use of cost-effectiveness analysis by EPA, then it will be worth its costs, even aside from the substantial health benefits EPA projects to result from its implementation.

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