A new paper by three economists, published Thursday in the journal Science, challenges how the Environmental Protection Agency has justified repealing a 2015 water protection rule and contends that the Trump administration ignored hundreds of millions of dollars in benefits the regulation would have produced each year.
But EPA officials, including a career official overseeing the agency's National Center for Environmental Economics, counter that Obama administration officials ignored warnings that they had used unreliable and outdated studies when calculating the regulation.
The dueling analyses of the rule, known as Waters of the United States, underscore how fraught scientific and economic data has become in recent years. In June, the agency proposed rescinding WOTUS, which formally extended federal jurisdiction over roughly 60 percent of U.S. water bodies, and announced that it would draft a replacement.
President Trump and EPA Administrator Scott Pruitt have been vocal critics of the rule; as Oklahoma attorney general, Pruitt sued in federal court to block it.
The regulation broadened the authority of the EPA and Army Corps of Engineers to cover wetlands adjacent to traditional navigable waters or interstate waters, as well as streams serving as tributaries to those waters. When officials first proposed it, they argued that roughly 117 million Americans relied on streams for clean drinking water that lacked clear protection, and they estimated that WOTUS would generate $339 million to $572 million in benefits annually.
The article's three authors — Virginia Tech's Kevin J. Boyle, Yale University's Matthew J. Kotchen and Arizona State University's V. Kerry Smith — note that the Trump administration's proposal to revoke the rule retains cost projections that are nearly identical to the ones the EPA offered in 2015. Those range between $158 million and $465 million annually, depending on the scenario.
Yet the anticipated benefits dropped by nearly 90 percent because the administration's new analysis excluded "wetlands-related benefits," which the EPA and the Army Corps concluded two years earlier were in the hundreds of millions of dollars.
Kotchen, a professor of economics at the Yale School of Forestry and Environmental Studies, said in an interview that Trump administration officials determined that these benefits were "unquantifiable," assigning them a value of $0, in part because they said it is difficult to gauge people's attitudes toward environmental protection without more-recent studies.
"But attitudes on government spending toward environmental protection have strengthened over time, if anything," Kotchen said.
Al McGartland, who directs the EPA's National Center for Environmental Economics and reviewed the 2015 and 2017 analyses, said the agency's official explanation for why it "dropped the studies" on wetlands benefits this year "was incomplete at best."
But he said his office had warned during the initial Obama-era rulemaking that the assumptions used to calculate benefits came from studies that "will not likely stand up to peer review," because they were outdated and because the total was extrapolated from studies of very different types of wetlands.
"The value of those wetlands, from an ecological point of view and from an economic point of view, varies dramatically," McGartland said, adding that the first analysis also did not factor in some states' policies to protect wetlands. "While it varies across states, we can absolutely say it's not nothing."
Don Parrish, the American Farm Bureau Federation's senior director of congressional relations, said the initial economic analysis failed to account for the full sweep of the government's expanded jurisdiction and drew an equivalence between wetlands such as the Florida Everglades and a ditch or farm pond. The bureau opposed the 2015 conclusions and urged Pruitt in multiple meetings this year to ditch them.
Ken Kopocis, who had headed the EPA's Office of Water at the time, said the agency relied on methods for assessing the value of environmental resources that have defined the field for decades. At the time, officials produced a report they said was based on "1,200 peer-reviewed, published scientific studies" and "showed that small streams and wetlands play an integral role in the health of larger downstream water bodies."
"Nothing . . . debunks the science underlying the rule in 2015," Kopocis said.
Boyle, a professor of agriculture and applied economics at Virginia Tech, said the EPA's approach in its most recent analysis is "not standard."
"The key thing is the reversal," Boyle said. "The costs become benefits, and the benefits become costs."
EPA spokeswoman Liz Bowman said the agency is doing a "thoughtful," longer-term analysis that will form the basis of the coming replacement rule.
"The previous administration used a lot of worst-case assumptions in their analysis," she said, "and we're using data based on the current reality."