How EPA weighs costs, benefits of air pollution regulation

Stan Alcorn Nov 26, 2014
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How EPA weighs costs, benefits of air pollution regulation

Stan Alcorn Nov 26, 2014
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On Tuesday, the Supreme Court agreed to take up a case challenging limits on toxins found in emissions from coal-fired power plants, on the grounds that industry believed the Environmental Protection Agency should have taken the costs of regulation into account earlier.

On Wednesday, the EPA proposed a rule to lower the amount of smog-causing ozone allowed in the air. The rule was slated for 2011, but delayed by President Obama on grounds that it was important to reduce “regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover.”

So how does the EPA weigh costs and benefits?

The agency is actually forbidden from taking costs into account when writing rules such as the limit on ozone, but EPA administrator Gina McCarthy says the health benefits nonetheless exceed the costs of compliance. The American Petroleum Institute, an oil industry trade group, comes to a very different conclusion in its analysis.

Richard Revesz , a New York University law professor and author of “Retaking Rationality: How Cost-Benefit Analysis Can Better Protect the Environment and our Health” says the EPA has generally underestimated, not overestimated, costs. But the whole argument over costs and benefits is largely about convincing the public and the politicians. 

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