Over the last three years, EPA has worked to minimize and reduce the support for public health regulations. We started tracking these efforts in 2017. Since then, the agency has used various maneuvers to shirk its responsibility to consider and act according to science demonstrating the value of reducing pollution. We identified three broad categories of tactics:
- Shrinking the scope of the benefits the agency considers
- Changing the methodologies used to calculate benefits
- Restricting the scientific evidence the agency can rely on for decision-making.
These actions reduce the dollar-value of benefits and/or inflate the projected costs of agency action to make it easier either to weaken pollution standards or to justify inaction.
Both EPA and the White House Office of Management and Budget analyze the costs and benefits of significant agency actions in accordance with executive orders issued by a bipartisan succession of presidents.[1] EPA’s adjustments to benefits calculations signal a deliberate effort to erode the agency’s ability to protect human health and the environment by pushing aside important evidence. If EPA’s process prevents it from accurately capturing and evaluating the benefits of reducing pollution, then it can rationalize maintaining the status quo and even allow backsliding.
REPEAL of THE CLEAN POWER PLAN
In October 2017, EPA issued a proposed rulemaking to repeal the Clean Power Plan.[2] The proposal introduced the administration’s strategy of denying the material and monetized benefits of reducing air pollution.
First, EPA calculated only the benefits of reducing carbon dioxide emissions despite the reality that other harmful pollutants would also be reduced at the same time and produce positive public health outcomes.
Second, EPA zeroed out the value of pollution-reduction benefits if they would have occurred in areas already meeting ambient air quality standards. The premise of the analysis was that reducing pollution beyond a certain level has no beneficial effect and thus no value. Many major studies contradict the zero-benefit premise.[3]
Third, EPA deflated the monetary value of the carbon dioxide reductions that Clean Power Plan would have achieved. The agency only counted direct domestic benefits of CO2 reduction rather than considering the potential benefits worldwide.
Fourth, the repeal proposal re-classified energy efficiency gains as benefits instead of avoided costs. This change raised the cost of the Clean Power Plan – adding more weight to the deregulatory side of the scale.
Fifth, EPA used a high discount rate (7%) for its social cost of carbon analysis which lowers the value of preventing future climate damage. The rate used in standard economic practice is 3%. The discount rate adjusts estimates of future climate damage into current dollars to determine what we could spend today to avoid future damage.
THE SOCIAL COST OF CARBON
A discount rate of 7% is valid if there is a consensus that it is not worth spending a dollar today and waiting for a return unless the return is 7% or higher. It is debatable for business decisions or investments whether that is reasonable. However, the social cost of carbon refers to whether it is worth it for the current generation to pay to make the planet habitable for the next generation. This is the kind of inherently altruistic decision that parents are used to making on behalf of their children – even decisions that entail no return. Would any parent who could afford to buy books or school supplies for a child insist on a 7% return before paying?
Framed this way, a discount rate above 0 seems like a harsh standard, but it shows how drastic a 7% value is. Combined with the other measures listed above, these actions crystallize into an unwavering commitment to deregulation.
Strengthening transparency in regulatory Science
In April 2018, EPA issued a proposed rule that would restrict the scientific studies that EPA can consider for regulation purposes. The administration champions a purported need for “transparency” in data over the ability to consider all relevant studies, some of which may have given participants assurances that data would remain confidential.
Two landmark studies on the negative health impacts of particulate matter pollution (soot), the Harvard Six Cities study and the American Cancer Society’s Cancer Prevention Study II, rely on confidential health data. Exclusion of these two studies has the potential to shift agency cost-benefit analyses on particulate matter pollution control, lowering the value of health benefits and making regulation more difficult to justify in light of costs.
CONSIDERation of COSTS AND BENEFITS in Rulemaking
In June 2018, EPA issued an Advance Notice of Proposed Rulemaking, which could be a framework for the new approach to costs and benefits. This proposal, “Increasing Consistency and Transparency in Considering Costs and Benefits in the Rulemaking Process,” seems poised to codify the processes of using cost-benefit analyses to weaken pollution standards by minimizing pollution reduction benefits.
EPA referenced commenters who argued “the Agency has justified the stringency of a standard based on the estimated benefits from reductions in pollutants not directly regulated by the action (i.e., “ancillary benefits” or “co-benefits”).” EPA provided an example to illustrate this concern, the Mercury and Air Toxics Standards (MATS) rule from 2012.
EPA went on to explain, “the monetized benefits from one of the pollutants being directly regulated (i.e., mercury) were significantly lower than the estimated costs of the rule, and the quantified benefits in the regulatory impact analysis outweighed the costs because of the benefits from reductions in ambient fine particulate matter.”[4] The Clean Power Plan repeal proposal already departs from this longstanding agency practice of considering all the benefits of pollution reduction that will result from the rule or action, not just the benefit of reducing the pollutant being targeted.
This notice lays the groundwork for codifying the Clean Power Plan repeal approach of excluding “co-benefits.” By citing the MATS rule, EPA may be signaling its plan to apply the same arguments regarding co-benefits to whether it is “appropriate and necessary” to regulate air toxics emissions in the power sector under the Clean Air Act.
The U.S. Court of Appeals for the District of Columbia Circuit has been holding litigation on the MATS rule in abeyance since 2017, at the request of the Trump administration. The administration informed the court that it would review its position in the case. EPA had relied, in part, on the calculation of co-benefits in determining that mercury regulation was “appropriate and necessary.” It is easy to see how this notice might clear the path for the EPA to rescind the appropriate and necessary finding.
Following this post, EPA finalized the repeal of the Clean Power Plan and proposed withdrawal of the “appropriate and necessary” finding for MATS. For more information on those actions and the proposal to limit the science EPA may consider, please see:
- White paper analyzing the repeal of the Clean Power Plan and the replacement rule: EPA’s House of Cards: the Affordable Clean Energy Rule
This post was edited for clarity on January 15, 2020.