EPA’s ‘Analysis’ of Clean Air Act Casts Doubt on Regulatory Review

In President Obama’s Executive Order, “Improving Regulation and Regulatory Review,” he instructed executive branch agencies to begin retrospective analyses of their existing regulations. The goal is to determine whether rules “may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.”

For that process to have any value, agencies must undertake it in good faith and engage in serious self-scrutiny. Unfortunately, bureaucracies are usually more interested in justifying their existence and activities, and the regulatory review is likely to be misused for that purpose.

The Environmental Protection Agency recent “analysis” of the benefits of the Clean Air Act provides a clear case in point. Last week the agency issued a news release, “EPA Report Underscores Clean Air Act’s Successful Public Health Protections/Landmark law saved 160,000 lives in 2010 alone“:

WASHINGTON – A report released today by the U.S. Environmental Protection Agency (EPA) estimates that the benefits of reducing fine particle and ground level ozone pollution under the 1990 Clean Air Act amendments will reach approximately $2 trillion in 2020 while saving 230,000 people from early death in that year alone. The report studied the effects of the Clean Air Act updates on the economy, public health and the environment between 1990 and 2020.

Diane Katz at the Heritage Foundation delves into the flawed assumptions, methodological gimmicks, and general spinning in a Webmemo, “Coming Clean on Regulatory Costs and Benefits“:

The report is astonishing for a variety of reasons—not the least of which is the enormous discrepancy between the Obama Administration’s numbers and those of a similar previous study by the Clinton Administration EPA, which pegged the economic benefits of the act to be $170 billion (or 91 percent less than the Obama EPA’s estimates). This magnitude of difference is explained by the unreliable assumptions underlying the Obama EPA’s wildly inflated claims.

Nevertheless, newspaper headlines across the country—and throughout the blogosphere—trumpeted the new cost–benefit calculation as proving regulation to be unquestionably beneficial. The media’s lack of scrutiny is particularly troublesome because, in this instance, the EPA is evaluating itself. Indeed, for every step beyond the agency’s press release, the questionable methodology and leaps of logic are painfully obvious.

As Katz summarizes: “The benefit estimates in the report range from $250 million to $5.7 trillion—a vast difference that indicates vast uncertainty about the EPA’s claims.” This from an Administration that has pledged itself to “sound science.”

Today’s  Washington Examiner reports that Chairman Fred Upton (R-MI) and leaders of the House Energy and Commerce Committee are holding the EPA to account, working to stop the agency from exceeding its authority and misusing the Clean Air Act to establish a national regime of greenhouse gas regulation. The committee’s Energy and Power Subcommittee holds two hearings this week that offer an opportunity to examine the EPA’s activities, including ginned-up analyses: Tuesday on Climate Science and EPA’s Greenhouse Gas Regulations, and Friday on the EPA’s budget.

For now, the EPA’s report suggests the limits of the Administration’s regulatory review:

  • White House to agencies: Go back and review all your old regulations.
  • Agencies to White House: Wow! They’re so much better than we ever thought!

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