By James Goodwin, Center for Progressive Reform
Today, the Center for Progressive Reform and 46 other environmental, labor, and public health organizations sent a letter to Environmental Protection Agency (EPA) Administrator Andrew Wheeler calling on him to withdraw the agency’s pending “benefits-busting” rule. Wheeler was recently confirmed as the official agency head, and, as the letter notes, he can begin his tenure on the right track by abandoning this dangerous rulemaking. The proposal is a vestige of the disastrous Scott Pruitt era that would radically overhaul how the agency performs “cost-benefit analysis” on the environmental and health safeguards it is developing so as to make the results even more biased against public protections.
The broad range of public interest groups signing on to the letter confirms just how far-reaching a threat the benefits-busting rule poses, not just at EPA, but all agencies charged with protecting the public interest. Indeed, the changes it makes to cost-benefit analysis – which, unfortunately, plays an outsized role in regulatory decision-making – could easily serve as a model that is adopted by other agencies, such as the Food and Drug Administration and the Occupational Safety and Health Administration, to block or weaken their own vital safeguards on behalf of powerful corporate interests.
The EPA has already provided an alarming preview of these harms with its proposal to reverse the “appropriate and necessary” finding undergirding the Obama-era rule to limit mercury and other hazardous pollutants emitted by coal-fired and other fossil-fuel-burning power plants. Reaching this determination required the agency to significantly distort the original cost-benefit analysis by arbitrarily excluding consideration of the rule’s “co-benefits” – that is, the various benefits to health, safety, and the environment that are achieved even though they were not the specific objective of the rule. In the case of the mercury rule, many of the benefits that could be quantified and monetized were co-benefits that resulted from reductions in particulate matter.
The rule still generated important direct benefits in the form of significant reductions in mercury and other hazardous emissions, but many were not fully amenable to quantification and monetization and thus were ignored – that is, excluded from the cost-benefit analysis. So, while the EPA was able to calculate the “monetary value” of protecting IQ loss for a very limited population of American children resulting from exposure to mercury pollution (and even then, that value only considered lost earning potential from the IQ reductions), numerous other beneficial aspects were not included, such as other harmful impacts of IQ reduction (e.g., non-employment-related losses in quality of life), other health impacts of mercury pollution (e.g., kidney disease in adults), environmental impacts of mercury pollution (e.g., damage to plants and other wildlife), and the wide array of harmful impacts of non-mercury hazardous pollutants (e.g., acid gasses and dioxin). The monetized and quantified “direct” benefits of the rule represent just a fraction of a fraction of a fraction of all such benefits from the mercury rule; the rest were arbitrarily assigned a value of zero dollars.
The EPA’s proposed reconsideration of the “appropriate and necessary” finding ignores this reality and pretends that the mercury rule’s costs far outweigh its benefits. But it can only achieve that outcome after cooking the books by scrubbing considerable co-benefits from the record. Even though the rule is a big winner in reality – according to the agency’s own analysis, the rule has already succeeded in reducing toxic power plant emissions by 90 percent – this analytical sleight of hand makes it appear to be a huge loser on paper. That outcome is no accident of accounting; it’s precisely why the Trump administration wants to ignore co-benefits.
And though the proposal doesn’t attack the mercury rule directly by seeking to repeal it outright, it does represent a sort of flanking attack by pulling the statutory foundation from beneath it. So, in addition to setting a dangerous precedent on excluding regulatory co-benefits from cost-benefit analysis, the proposal also has the indirect consequence – co-benefit, if you will – of making the mercury rule more susceptible to successful legal challenges in the future.
This story is worth paying attention to because one of the likely changes that the EPA’s benefits-busting rule would seek to introduce is to make exclusion of co-benefits applicable to all of the agency’s rules. That’s not all, though. The letter explains how the rule could also seek to override all of the regulatory standards in laws like the Clean Water Act and Clean Air Act and replace them with a strict cost-benefit analysis standard, which by definition is less protective of the environment and public health. In one fell swoop, then, this change would potentially transform the EPA from a strong guardian of the public interest into the regulatory equivalent of a Potemkin village, and it would break the law in the process.
As the new EPA Administrator, Wheeler now has an opportunity to leave a stronger EPA, rather than a weaker one, as his legacy. To do that, though, he’ll need to start by pulling the plug on the benefits-busting rule.