Comments on “Increasing Consistency and Transparency in Considering Benefits and Costs in the Clean Air Act Rulemaking Process”

Abstract

Were this anti-regulatory NPRM—or any logical outgrowth of it—to be finalized, it would result in repeated violations of the Clean Air Act and the Administrative Procedures Act. The problematic methodologies being codified in this NPRM would often generate nonsensical, arbitrary results, and would promote multiple biases that undermine the goals of the Act.It is unfortunate that the Trump administration is rushing out a slew of standards during a national pandemic. The stakeholders that normally would organize and engage to protest these actions through participation in notice-and-comment rulemaking and strategic litigation are spread thin, and many do not have sufficient time to participate meaningfully. Women, in particular, have been negatively impacted by the lack of normal childcare supports during this time, and COVID-19 infections have disproportionately affected people of color. Many organizations have requested an extension of time to respond to this rulemaking;unfortunately, EPA provided only a week’s extension, leaving a comment period of less than 60 days. Under the circumstances, this refusal to allow adequate time for the public to review and critique the proposed econometric and scientific methodologies—which are to be applied to a diversecollection of very complicated provisions—was unreasonable, arbitrary and capricious.And the stakes here are incredibly high. Consider PM 2.5 pollution, which causes tens of thousands of excess deaths every year. Virtually any CAA regulation that reduces any type of air pollution will—intentionally or not—reduce the number of fatalities that result from exposure to PM 2.5. The issue of how we value this human impact of pollution regulation and deregulation is far too important to be given such rushed treatment. Rather than carefully consider the best way to conduct an econometric analysis—if one is even appropriate—or the best way to use risk assessment data, the Trump EPA seems instead to be intent on codifying a set of biased methodologies while it still has control of the agency. If successful, the outcome will be dramatic—a thumb on the scale in favor of weaker standards, with millions of undercounted and systematically undervalued human lives hanging in the balance.This rulemaking is an effort to use a general authorization to issue CAA regulations to enable the EPA to override the more specific provisions of the CAA that limit or prohibit certain considerations. This is not a legitimate use of section 301(a)(1) of the Clean Air Act. Many of the regulatory analyses being “standardized” with this rulemaking did not begin to gain traction in the environmental context until after the CAA had been enacted. It is thus unsurprising that they often do not square well with the objectives, substance, and procedure actually laid out in the CAA. To overlay the methodologies advanced in this NPRM over the entire mass of diverse CAA provisions would re-write those provisions to favor factors that are currently in vogue among regulated industry (and, often, the think tanks and the holders of academic institutes that they help fund), but which were not intended to be enacted in 1970 when Congress established the CAA.In addition, the attempt to solicit the legal authority for the rule from the public is contrary to the requirements of the APA, which requires that notice must include “the legal authority under which the rule is proposed.” Moreover, by requiring justification for any departure from OMB Circular A-4, this NPRM essentially codifies A4’s CBA methodological requirements. Unfortunately, A-4 sets out methodologies that generate “garbage out” results. In an attached publication submitted herewith, I trace the origin of these cost-benefit rules, demonstrating that Circular A-4 was developed through a fundamentally flawed process, one that intentionally excluded majority viewpoints in several relevant academic disciplines. Circular A-4 also contains serious methodological mistakes. If these mi takes were to be applied to, for example, CAA regulations addressing domestic greenhouse gas emissions (that is, if EPA follows the rules as set out in this NPRM), this injection of both outright irrationality and arguably unethical subjective biases into domestic regulatory policy would threaten to derail substantive U.S. action on climate change.In the instant NPRM, EPA claims that “OMB Circular A-4 . . . was issued after peer review and public comment and has been widely accepted for more than a decade as embodying the best practices for conducting regulatory cost-benefit analysis.” This is simply not true;A4 was not subjected to meaningful peer review. Similarly, EPA’s claim in the instant NPRM that A-4 was subjected to public “notice and comment” is misleading, since the phrase evokes notice-and-comment procedures under the APA, which were not followed in the establishment of A-4.CBA is a microeconomic tool that was originally developed to evaluate comparatively small projects, such as TVA dam projects. It was never meant to—and it cannot—serve as a meaningful tool in evaluating policies that will influence the entire economy, such as determinations of whether to reduce greenhouse gas emissions meaningfully. These concerns are inherently macro, and these decisions involve complicated feedback mechanisms and othercomplexities that make them unsuited for the tools agencies currently use in RIAs prepared under the direction of OIRA and Circular A-4.Executive Order 12,866 is impossible to comply with in a literal manner, because it creates a series of “max/min” problems with no common solution. This creates a conundrum that, over and over again, would be resolved under these cost-benefit rules in favor of maximizing quantifiable, monetized “net benefits,” at the expense of promoting a set of competing yet also important rights- and duty- based factors that the text of the parent executive order ostensibly puts on equal footing. These deontological concerns deserve attention from EPA, and should not be summarily dismissed in favor of an anti-regulatory, entirely welfarist analytical rubric.