Trump EPA Finalizes Cost-Benefit Rule That Makes Most Air Pollution Regulations Too Expensive to Implement

The new rule orders the agency to weigh the dollar cost of regulations and disregard benefits like illnesses and deaths avoided.
December 10, 2020

U.S. Environmental Protection Agency Administrator Andrew Wheeler announced the finalization of a rule that could result in the agency's deeming most new air pollution regulation proposals too expensive to implement.

The rule codifies the way the agency will assess the costs and benefits of future Clean Air Act regulations. It will allow the EPA to weigh all economic costs of air pollution regulation while undervaluing health benefits, in effect tilting the scales against the implementation of new policies. It runs counter to the recommendations of the EPA’s own Science Advisory Board, headed by Indiana University professor John Graham, which says any economic analysis of regulations should include indirect as well as direct costs and benefits.

Wheeler announced the final rule during a webinar with a conservative thinktank December 9.

EPA administrator Andrew Wheeler announced the finalization of the rule during a Heritage Foundation webinar.

“Today’s action ensures that EPA is consistent in evaluating costs and benefits when developing broad-reaching policies that affect the American public," Wheeler said. “Thanks to President Trump’s leadership, we are ensuring that future rulemakings under the Clean Air Act are transparent, fair and consistent with EPA governing statutes.The American public deserves to know the benefits and costs of federal regulations.”

Among the changes is a requirement that the EPA consider only a very limited amount of human health evidence in its analysis.

The EPA will also have to, among other things, describe the “problem” being addressed by a proposed regulation, the “reasons for and significance of any failure of private markets or public institutions causing” the problem and justification for why government intervention is required.

Former acting assistant administrator for the EPA’s Office of Air and Radiation Janet McCabe said the rule will make regulations look like they cost more than they do, giving regulated industries a legal basis to bring legal challenges to future rules.

“A lot of the things that are called for in this rule I think the EPA already does, but by putting them in a rule, it turns it into something that can form the basis of a legal challenge to the rule,” said McCabe, who serves as director of Indiana University’s Environmental Resilience Institute. “I’m presuming that the reason they moved it along this fast is to make sure that they could get those things done before the new administration comes in.”

Wheeler signed the rule Dec. 8.

The EPA’s Science Advisory Board, chaired by Graham of IU’s O’Neill School of Public and Environmental Affairs, reviewed the EPA’s “Guidelines for Preparing Economic Analyses,” an April 2020 update of the 2010 version on which the finalized rule is partly based. The board concluded in a draft copy of a report to the EPA released in September that the agency should not exclude direct or indirect health benefits.

“Economic analysis of regulatory or policy options should present all identifiable benefits and costs that are incremental to the regulation or policy under consideration. This comprehensive accounting should include direct impacts (benefits and costs) as well as ancillary (or co-)benefits and costs, as explained in [Office of Management and Budget] guidance,” the report said.

It’s unclear whether the board sent a final copy of the report to the EPA or whether anyone at the agency read its contents before finalizing the current rule.

President-elect Joe Biden promised to strengthen air pollution laws, including tightening methane pollution limits, reducing greenhouse gas emissions from the transportation industry and “doubling down” on advanced biofuels.

Those policy goals would face the cost-benefit barrier set by the Trump EPA.

“With this deeply flawed rule, Andrew Wheeler and the Trump Administration are trying to force future EPA administrators to tip the scales in favor of polluters, not public health,” said Al Armendariz, former EPA Region 6 administrator during the Obama administration and current Sierra Club senior director of federal campaigns. “This change in how EPA calculates the overwhelming benefits of clean air protections means public health experts and scientists at EPA could ignore the children suffering through severe asthma attacks, seniors rushing to hospitals with heart attacks, and the tears of millions of families burying their loved ones who died prematurely — just so some fossil fuel executive won’t have to reduce air pollution from their power plant.”

The new rule is likely to face multiple legal challenges.

Trump EPA Finalizes Cost-Benefit Rule That Makes Most Air Pollution Regulations Too Expensive to Implement