ICYMI: EPA Takes Step Toward Implementing Better Cost-Benefit Analysis on Major Rules
January 7, 2014
Sen. David Vitter (R-La.), top Republican on the Environment & Public Works Committee, has been working to hold the Environmental Protection Agency (EPA) accountable to the American public, specifically focusing on transparency and sound science. During the nomination process for Gina McCarthy, current EPA Administrator, EPW Republicans won commitments from EPA to convene an independent panel of economic experts with experience in whole economy modeling to review EPA's modeling and the Agency's ability to measure full regulatory impacts, and to make recommendations to the Agency. Click here to read more from InsideEPA on the progress.
EPA's Science Advisory Board (SAB) this year will begin a review of how the agency could use modeling to assess the "whole economy" impact of its rules, an approach backed by GOP lawmakers who say EPA's existing models fail to analyze employment impacts but opposed by advocates who say doing such an analysis is a near-impossible task.
While EPA has agreed to ask SAB for input on how to use whole economy modeling in its regulatory work -- a review it agreed to ask SAB for in exchange for Republicans dropping their hold on the nomination of Gina McCarthy to be the next agency administrator -- EPA officials have expressed doubts in the past about the ability to use such models as part of the process for analyzing the projected economic costs and benefits of upcoming rulemakings.
A GOP EPW aide says SAB will look at the direct and indirect impacts of regulation, such as employment and economic losses, along with the "cascading effects" of regulation across industries and markets.
The panel is set to follow typical SAB procedures, in which panel members will respond to "charge" questions that are compiled by EPA, but the GOP aide says Republicans on the environment and other committees plan to send to the SAB panel their own charge questions. It it unclear if the panel would respond to an alternate set of charge questions, though the panel typically takes into account public comments when crafting its responses.
EPA appears to be a somewhat reluctant partner in the push for greater use of whole-economy modeling. Although the agency has tried to develop tools to estimate the economic effects of its regulations and has committed to improving its economic models, the agency only agreed to launch the whole-economy modeling project as a part of the deal with EPW ranking member Sen. David Vitter (R-LA) to end the hold on McCarthy's EPA nomination.
Vitter said earlier this year that his interest in whole-economy modeling is an attempt to improve "transparency." He has charged that the agency is failing to conduct complete cost-benefit analyses, as required by executive order, and has also faulted the agency for not complying with section 321(a) of the Clean Air Act, which directs the agency to conduct "continuing evaluations" of how its rules will cause potential losses or shifts in employment.
Sen. John Barrasso (R-WY), another supporter of whole-economy modeling, early this year backed an unsuccessful budget rider that would have reprogrammed EPA funds to support whole-economy models.