If the EPA wants to defeat its mandate to protect public health and the environment from pollution, a coordinated series of attacks on how the benefits of pollution reduction are defined and quantified is on the critical path to doing so. Since at least October 2017, the EPA has taken steps along that path, introducing a new companion to climate denial – health benefits denial.
The angles of attack, via partial or full denial that benefits exist, fall into at least three categories:
- Shrinking the scope of the benefits considered to reduce the estimated benefits of a potential action by excluding the benefits of the full range of pollution reductions achieved by a specific action, zeroing out the benefits of reducing pollution below a given level.
- Changing the methodologies used to calculate benefits to reduce the estimated benefits of an action as well as of future actions.
- Restricting the scientific evidence the agency can rely on in decision-making to change the outcome of agency decisions, particularly when excluded evidence would support benefits evaluation.
Together their effect – and their likely purpose – is to deflect the legal and policy imperatives that would otherwise compel the EPA to advance new or more stringent pollution standards and to preserve existing standards.
These attacks have been carried out, proposed or previewed in actions ranging from the proposed repeal of the Clean Power Plan, to recent proposals to suppress a class of peer-reviewed health science studies and change cost-benefit analysis.
Thanks to a series of executive orders issued by a bipartisan succession of presidents, both the EPA and the White House Office of Management and Budget analyze the costs and benefits of significant agency actions. Reducing the dollar-value of benefits and/or inflating the projected costs of agency action make it easier either to weaken pollution standards or to justify taking no action to cut pollution in the first place. The EPA’s relentless consistency in applying, proposing or previewing adjustments in how benefits calculations are performed signals a deliberate effort to erode EPA’s ability and mandate protect human health and the environment and push aside the evidence required to take action. If the EPA applies analytic tools that all but blind it to the benefits of reducing harmful pollutants, then it need not take further action to cut pollution.
Like other changes Pruitt has made during his tenure, these actions rest on dubious arguments and proffered justifications. These changes make sense, however, as part of a strong preference to withdraw the EPA from its public health mission and to assemble the tools to achieve that.
Proposal to Repeal the Clean Power Plan
In October 2017, the U.S. Environmental Protection Agency (EPA) issued a Notice of Proposed Rulemaking to repeal the Clean Power Plan (“Repeal of Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units.”)
While Scott Pruitt’s “climate denial” statements were already well-known as of October, the repeal proposal introduced a new exercise in denial – the denial of material and monetized benefits of reducing air pollution.
- First, the 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. Thus, the EPA’s benefits calculation assigned a zero-dollar value to the reduction in other pollutants, notwithstanding that those reductions, and the resulting improvements in public health, would occur if the Clean Power Plan were implemented.
- Second, the repeal proposal included an analysis that 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, most recently: “Association of Short-term Exposure to Air Pollution With Mortality in Older Adults”, (Qian Di, MS1; Lingzhen Dai, ScD1; Yun Wang, PhD2; et al Antonella Zanobetti, PhD1; Christine Choirat, PhD2; Joel D. Schwartz, PhD1; Francesca Dominici, PhD2); JAMA. 2017;318(24):2446-2456. doi:10.1001/jama.2017.17923.
- Third, the EPA deflated the monetary value of the carbon dioxide reductions that Clean Power Plan would have achieved. Although the effects of carbon dioxide are felt globally and not just in the United States, the EPA, using the Trump administration’s Social Cost of Carbon approach, counted only direct domestic benefits of carbon mitigation activities rather than considering the potential benefits worldwide.
- Fourth, again adopting the Trump Social Cost of Carbon approach, the EPA used a higher discount rate (7%) than the rate used in standard economic practice (3%). The discount rate adjusts estimates of future climate damage into current dollars to determine what we could spend today to avoid future damage. A higher discount rate dramatically scales back estimates of future damage. A higher discount rate lowers the value of preventing future damage and makes it easier to portray current regulations as having costs that exceed their benefits.
The Social Cost of Carbon
It is worth pausing a moment to examine this discount-rate maneuver. In effect, the Trump/Pruitt 7% discount is valid if there is a consensus that it is not worth spending a dollar today and waiting a number of years for a return unless the return is at or above 7%. That may or may not make sense if the decision maker is an ordinary business or investor.
However, the decision here is whether it is worth it to one generation to pay costs for the sake of 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 at all to the cost-paying parents. Would any parent who could afford to buy books or school supplies for a child insist on a 7% return to him/herself before paying the cost?
Framed this way, a discount rate above 0 seems like harsh standard, but it shows how drastic a choice the EPA made in selecting a 7% value for analyzing this proposal. In concert with the other devices it adopted for excluding or zeroing out various benefits of reducing pollution, these actions crystallize into an unmistakable approach that the EPA has followed under Pruitt’s leadership: changing or adopting rules, practices and methods to accomplish, in all instances, a deregulatory outcome.
Finally, the analysis of the Clean Power Plan reflected the Plan’s energy efficiency incentives and classified energy efficiency gains as avoided costs. The repeal proposal re-classified energy efficiency gains as benefits. The result was to elevate the cost of the Clean Power Plan – adding yet more weight to the deregulatory side of the scale.
Proposal to Change What Science the EPA Will Consider
On April 30, 2018, the EPA issued a Notice of Proposed Rulemaking for “Strengthening Transparency in Regulatory Science.” This proposal is focused on restricting the scientific studies that EPA can consider on the basis of the data that underlies the studies. The administration champions a need for “transparency” in data over considering the full range of 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 data that must be kept confidential. Elimination of these two studies from agency consideration has the potential to shift any cost-benefit analyses conducted with regard to particulate matter pollution control strongly toward a scenario where the regulatory costs appear to outweigh the health benefits. Moreover, it would be easier to justify allowing higher levels of pollution or regulatory inaction without these studies.
Proposal on Considering Costs and Benefits in Rulemaking/MATS Rule
In early June 2018, EPA issued an Advance Notice of Proposed Rulemaking, which may act as a framework for the new approaches to costs and benefits applied or previewed in the Clean Power Plan Repeal proposal. This latest notice, “Increasing Consistency and Transparency in Considering Costs and Benefits in the Rulemaking Process,” seems poised to codify and formalize the processes of cost-benefit analyses to weaken pollution standards by way of minimizing the recognition and calculation of benefits yielded by pollution reductions. Notably, the Advance Notice of Proposed Rulemaking included a statement that some commenters had 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 then selected an example to illustrate this complaint, the Mercury and Air Toxics Standards (MATS) rule from 2012. EPA goes 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.”
As discussed above, the Clean Power Plan repeal proposal included an analysis that assigned no value to reductions of pollutants other than carbon dioxide. This notice lays the groundwork for codifying the same “no co-benefits” approach the EPA used in the repeal proposal – assigning zero value to the full range of pollutants reduced. By citing the MATS rule as an example in this notice, the EPA may be signaling its plan to apply the same arguments regarding co-benefits to, at the very least, the one remaining MATS issue still in litigation – whether it is “appropriate and necessary” to regulate air toxics emissions in the power sector under the Clean Air Act. The Circuit Court of Appeals for the District of Columbia has been holding the case in abeyance since 2017 at the request of the Trump administration, which stated its intention to review its position on the question presented in the case. The EPA had relied, in part, on the calculation of co-benefits in determining that regulation was “appropriate and necessary”. It is easy to see how this notice might be clearing the path for the EPA to rescind the appropriate and necessary finding. At the same time, relying on the exclusion of co-benefits as an instrumental justification for rescinding the “appropriate and necessary” finding would confirm the Pruitt EPA’s commitment to excluding from the agency’s benefits calculations the full range of pollution reductions achieved by a particular.