Last month, in a step that received relatively little attention, the EPA issued an Advanced Notice of Proposed Rulemaking soliciting comments on its use of cost-benefit analysis. As the Notice explains, the EPA is required by a series of executive orders to conduct a cost-benefit analysis (“CBA”) each time it promulgates a major rule. (For the most part, the rules classified as “major” are those with economic impact greater than $100 million.) The manner in which the EPA—and other agencies—conduct CBA is informed by guidance documents issued by the Office of Management and Budget and the agency itself. Nonetheless, the practice of cost-benefit analysis has typically been inconsistent both across agencies and within agencies. Some of these inconsistencies stem from differences in agency policies and approaches. For instance, the EPA and the Department of Transportation use different values of life when conducting CBA. Other inconsistences stem from the many different statutes under which each agency regulates. Under the Clean Water Act, for instance, the EPA is variously directed to mandate the use of the “best available technology economically achievable,” the “best conventional pollutant control technology,” and the “best practicable control technology,” depending upon the type of pollution source being regulated. The Clean Air Act supplies a panoply of different standards as well. This has led the EPA to treat costs and benefits differently in different regulations, depending upon the statutory section that provides it with regulatory authority.
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