When writing virtually any environmental rule, the USEPA performs and publishes its calculations of the financial cost of implementing the rule vs. the gains in terms of extending human life, improving public health, and prevention of environmental degradation. While one can quibble about the approach or formulas, the USEPA is transparent about why it believes a proposed rule or rule change is beneficial to society.

This article is not intended to be political in any way, but a warning that the USEPA is in the process of changing this approach and this will affect future rulesmaking. The current USEPA is looking to de-emphasize the life and health benefits of a proposed rule and emphasize compliance costs instead. The recent proposed change in the Clean Power Plan (CPP) (discussed in another article in this newsletter) openly states that it will decrease the number of prolonged lives compared to CPP and that the increase in greenhouse gases it will cause will have adverse economic effects. But the agency is pushing for this replacement because it will reduce the upfront costs of affected facilities to comply.

It was thought initially that the new approach of the USEPA is to de-emphasize protection of public health benefits to favor an overall evaluation of monetary benefits. But even this does not seem to be the case in the CPP replacement bill, as it would reduce some of the monetary benefits to the nation.

Another irony is that a number of affected industries of Obama-era environmental rules have come out against revising them. Duke Energy, for example, came out against revising CPP because of money already invested in required controls. Since money has already been spent to comply, the rule might as well stay in effect and benefits acrue.

In addition, research into environmental rule effectiveness shows that many rules are achieving public health goals at reasonable costs. The 2011 Clean Air Mercury rule cost utilities – by their estimation – about $18 billion to install compliant technology. Mercury emissions dropped by nearly 70%, resulting in direct health benefits of $4 to $6 billion. The USEPA went on to state that savings of an additional $80 billion per year was achieved due to the indirect benefits of reducing mercury emissions, such as reduction in lung and heart disease, resulting in 11,000 premature deaths delayed per year.

USEPA Administrator Andrew Wheeler stated that the agency is looking into an overhaul of how to calculate the cost and benefits of environmental regulations. His predecessor, Scott Pruitt, stated that he felt that the agency did not properly perform cost-benefit analyses, artificially inflating benefits and underestimating costs. They stated that the agency has been guilty of picking winners and losers and tainting their analyses to encourage the changes it wishes. The formulas in USEPA cost-benefit calculations must be modified, they and their supporters say.

Others complain that the formulas used by the USEPA do not go far enough to show the benefits of a healthier population by not taking into consideration the cost to the US economy of job loss due to layoffs and sick time.

CCES can help your firm keep up with changing environmental rules at the federal, state, and local level and provide you with the information to make the best determination of compliance options. Contact us today at 914-584-6720 or at karell@CCESworld.com.