June 15, 2021

Private: Ann Jaworski

No More Smoke and Mirrors

Restoring Sound Science in Clean Air Cost-Benefit Analysis

In a victory for clean air and sound science, the EPA is rescinding a Trump-era rule misleadingly titled Increasing Consistency and Transparency in Considering Benefits and Costs in the Clean Air Act Rulemaking Process. As we wrote in 2020, the Benefit-Cost Rule was both unnecessary and harmful. It limited the types of scientific data and health benefits that could be considered in the rulemaking process, encouraging misleading and low-quality analysis that would benefit polluters over public health. ELPC recently testified at a public hearing and submitted comments with other groups supporting the recission of the Benefit-Cost Rule.

EPA Identified Six Reasons for Rescinding the Benefit-Cost Rule:

1. The Benefit-Cost Rule failed to establish a rational basis for its requirements based on the Rule’s record.
2. The Benefit-Cost Rule Was not necessary to carry out the Clean Air Act because the EPA already prepares a Benefit-Cost Analysis for Clean Air Act rules that warrant such analysis.
3. The specific requirements in the Benefit-Cost Rule limited the EPA’s ability to rely on the best available science.
4. The Benefit-Cost Rule’s requirements to present benefits in particular ways (for example, separated into global vs. domestic, or “direct” and “indirect” benefits) invited net benefit calculations in regulations that are misleading and inconsistent with economic best practices.
5. The Benefit-Cost Rule did not reconcile its requirements with the fact that portions of the Clean Air Act prohibit consideration of costs when issuing regulations.
6. The pre-existing administrative process provides for ample consistency and transparency.

Any one of these six identified flaws is an independently sufficient reason for rescission, and together these flaws demonstrate that EPA is correct to rescind this harmful rule. As EPA said in the Rescission Rule, “the changes to Agency practice required by the Benefit-Cost Rule were inadvisable, not needed, and untethered to the CAA.”

Importantly, there are additional reasons to rescind the Benefit-Cost Rule that EPA did not identify:

The Benefit-Cost Rule was Built on Inaccurate Assumptions

In adopting the Benefit-Cost Rule, EPA apparently relied on comments asserting that EPA’s Clean Air Act rulemakings have historically overestimated benefits and underestimated costs. In fact, the reverse is true, as comments submitted by ELPC and partner groups pointed out.

In its 2011 analysis of the benefits of the Clean Air Act, EPA determined that its assessment of costs and benefits of Clean Air Act programs is “more likely to understate net benefits than overstate them.” Likewise, a 2014 study by EPA’s National Center for Environmental Economics contained a literature review of studies, the vast majority of which found that the costs of environmental regulations were overestimated far more frequently than they were underestimated. The Benefit-Cost Rule’s failure to engage with the evidence of the ways in which EPA’s benefit-cost assessments have historically been inaccurate, and its seeming assumption that those assessments were skewed in the opposite direction, make the rule arbitrary and capricious.

The Rule Would Have Disproportionately Harmed Environmental Justice Communities

The Benefit-Cost Rule would have posed a significant barrier to fulfilling the mission of the Clean Air Act and those forgone pollution reductions and resulting health harms would have disproportionately affected environmental justice communities that bear the greatest burden of air pollution.

The Clean Air Act has successfully improved air quality and public health. In 2011, EPA estimated that, every year, Clean Air Act protections prevent more than 200,000 deaths, 2 million childhood asthma attacks, and 22 million lost school and workdays, in addition to other health benefits. The agency also projected that from 1990 to 2020, the benefits of Clean Air Protections would exceed compliance costs by a factor of 30 to 1. But there are still worrisome disparities in pollution exposure. 135 million Americans still live in counties with unhealthy air, and people of color are more than three times as likely as white people to breath unhealthy air.

The Benefit-Cost Rule’s limits on consideration of certain types of scientific data and the consideration and presentation of certain categories of benefits would have impeded the adoption of additional public health protections that are critically needed to ensure breathable air to currently overburdened communities. The Benefit-Cost Rule’s failure to undertake any analysis of these potential environmental justice impacts is directly contrary to EPA’s mission under the Clean Air Act. Rescinding the Benefit-Cost Rule is consistent with this Administration’s stated commitment to environmental justice and is a necessary step to address persistent inequalities in air pollution exposure.

ELPC is pleased that EPA has now recognized that the Rule was arbitrary and capricious, unnecessary, and undermined the statutory goals of the Clean Air Act. With this barrier to regulation removed, EPA can move forward to adopt new rules that further the Clean Air Act’s mission of healthy, breathable air for all.