The Washington PostDemocracy Dies in Darkness

EPA to review how it adds up the economic pros and cons of environmental rules

Environmental Protection Agency Administrator Scott Pruitt testifies before a House Appropriations subcommittee in April. (Ricky Carioti/The Washington Post)

Under President Trump, the Environmental Protection Agency has sought to change the way its researchers review science. Now the agency is taking aim at the way it does economics.

The EPA took an initial step this week toward changing how it calculates the economic benefits and costs of regulatory decisions, a revision long sought by conservative allies of Trump.

Under many environmental laws, the agency is required to tabulate the economic pros and cons of measures imposed on companies to reduce air and water pollution. For years under President Barack Obama, conservatives complained that agency officials overestimated the health and financial benefits of reducing carbon emissions from power plants.

So on Thursday, the EPA announced it will solicit comments from companies, nonprofits and members of the public about how to do such cost-benefit analyses differently — bringing into the agency a long-running debate over how the government justifies new rules.

“Many have complained that the previous administration inflated the benefits and underestimated the costs of its regulations through questionable cost-benefit analysis,” EPA chief Scott Pruitt said in a statement Thursday. “This action is the next step toward providing clarity and real-world accuracy with respect to the impact of the Agency’s decisions on the economy and the regulated community.”

Some of nation’s major anti-pollution laws, such as the Clean Air Act and Clean Water Act, ask the EPA to consider costs in writing new rules. But Pruitt’s EPA argues that the laws are inconsistent in describing how such analyses are done and is pushing for what it calls uniformity and transparency.

Environmental groups reacted to the EPA’s announcement with dismay. Ana Unruh Cohen, managing director for government affairs at the Natural Resources Defense Council, suggested such rulemaking could obscure the benefits of anti-pollution rules to the public.

Pruitt’s actions are “founded on a big lie: that federal rules cost more than the benefits,” Cohen said. “In fact, the opposite is true — by a country mile.”

Michael Greenstone, an economics professor at the University of Chicago who served on Obama’s Council of Economic Advisers, said the EPA’s notice for the proposal was itself fairly “vapid,” but the news release that accompanied it critically singled out examples of analyses from the Obama administration, suggesting the EPA is heading in a particular direction.

For instance, the agency faulted how the Obama administration took into account co-benefits, those that come from “reduced emissions of a pollutant that is not the actual target pollutant of a regulation.” The proposal cited the Clean Power Plan, which targeted carbon dioxide emissions but justified the regulation based on large benefits from reducing the health impacts of particulate air pollution, which decreases along with CO2 when there is less burning of fossil fuels for energy.

“The way I like to think about it is, if I press a button and something good happens, why would I want to not count half of the good that is produced by pressing that button?” Greenstone said. “There’s no explanation given.”

Greenstone added that Pruitt seems to already have in mind the answer to the question on which the agency is seeking comment. “This appears to be policy-based evidence making. Where you set the policy, and then you go backwards and manufacture the evidence,” he said.

Another common complaint among conservatives, according to Diane Katz, a senior fellow at the conservative think tank the Heritage Foundation, is that the EPA compared the domestic costs of reducing carbon emissions against the global benefits of mitigating climate change.

“We’ve seen them use a number of tricks that we find troubling,” Katz said of Obama’s EPA.

Lisa Heinzerling, a law professor at Georgetown University who served in the agency under Obama, noted that the proposal is a regulation that applies just to how the EPA does things. Mostly, the agency has not been regulating, she said, but moving to deregulate.

Heinzerling noted a parallel with Pruitt’s recent proposal to change how the agency uses science in making regulatory decisions. In April, Pruitt moved to limit which studies the EPA can use in writing regulations to only those for which the underlying data is made public, excluding some landmark research that involves confidential personal or medical histories or proprietary information.

“The striking thing about this and the science proposal is, those are the two really major regulatory initiatives of this administration, and they’re both directed at the agency,” she said.

“The only thing they’re regulating is themselves,” she said. “And the reason they’re doing that I think is that in the future, the agency will have to go through rulemaking to undo whatever they do here.”

The announcement earned quick praise from Republicans in Congress, providing Pruitt political cover during a week when he has weathered new revelations about enlisting EPA staff to help him pick up his dry cleaning, purchase a used hotel mattress and try to secure for his wife a Chick-fil-A franchise.

“During the Obama administration, the Environmental Protection Agency exaggerated the benefits of Washington regulations and misjudged how costly they are to the economy,” Sen. John Barrasso (R-Wyo.), chairman of the Senate Environment and Public Works Committee, said in a statement Thursday. “Now the Trump administration is taking important steps to make sure the agency can no longer abuse the cost-benefit analysis process.”