In the News

At least some trucking industry analysts said they expect the latest version of the hours-of-service rule to land back in federal court because the rule seems to satisfy no one.

“I think the industry’s going to challenge it, and I think there’s a good chance that the public interest groups are going to challenge it,” said Michael Livermore, executive director of the Institute for Policy Integrity in the New York University School of Law.

The EPA may be underestimating the benefits of the new rules. As Michael Livermore points out, mercury is a dangerous neurotoxin for small children, and the EPA’s analysis of that danger is limited to quantifying lost future earnings due to lower IQ. But even a grinch wouldn’t pretend that the cost of this kind of neurological damage is limited to lower wages.

Much of this is due to reductions in particulate matter, not mercury, which suggests that, if anything, the EPA may be underestimating the benefits of the new rules. As Michael Livermore points out, mercury is a dangerous neurotoxin for small children, and the EPA’s analysis of that danger is limited to quantifying lost future earnings due to lower IQ. But even a grinch wouldn’t pretend that the cost of this kind of neurological damage is limited to lower wages. “There are,” says Livermore, “also risks of cognitive and social defects, negative autoimmune effects, genetic effects, and heart attacks that are not quantified.”

Now, that doesn’t mean the EPA isn’t cleaning up mercury, or that the mercury benefits are worthless. What it means is that it’s easier to put a hard number on the benefits from cleaning up particulate pollution — by totaling up the dollar value of lives saved — than it is to calculate the full value of, say, avoiding cognitive damage in young children. Scientists are still struggling to quantify the damage wreaked by mercury. And, as Michael Livermore writes, the EPA didn’t put a dollar value on various benefits from the regulation, like reducing mercury in store-bought fish, because it was too murky. The benefits may be there, but they’re not factored in.

“Power plants that are old and dirty should’ve ended their useful life already and gone out of commission,” added Michael Livermore, executive director of the Institute for Policy Integrity and adjunct professor at New York University. “We live in the 21st century. We shouldn’t be using plants from 1950s.”

“The benefits of this rule outweigh the costs by a huge factor,” he said. “In fact, given the huge ratio of benefits to costs, we could make the rule even more strict and still generate even greater net benefits.”

“This is going to be have very important public health benefits for years to come,” said Michael A. Livermore, the executive director of the Institute for Policy Integrity, a think tank affiliated with New York University School of Law. And from an economic perspective the rule was a “slam dunk,” he said. “The benefits swamped the costs.”

Environmentalists and public health advocates have a reason to stand up and cheer: Finalized rules to cut down on mercury air pollution are set to be announced today by the EPA.

But economists can also feel good about this holiday-season gift of clean air: Two decades of agency analysis have found the EPA’s new mercury standards for power plants to be overwhelmingly cost-benefit justified. With annual compliance costs around $11 billion, and health benefits estimated to be up to $140 billion per year, even the most hard-nosed bean counter should be feeling festive.

Some folks seem to imagine that there’s a small, semi-secret team of economist-bureaucrats in the White House toiling away to scuttle environmental regulations. Others think this office of experts has unleashed a regulatory tsunami on businesses, drowning profits and washing away jobs.

There is, in fact, such a group—though it’s not doing either of those things, at least not intentionally. It’s the unsexy but important Office of Information and Regulatory Affairs (OIRA), charged with weighing the economics of any regulation worth more than $100 million. Carefully reviewing the cost-benefit analyses agencies perform for each major rule, these (mostly) economists look to see if the experts have accurately examined whether, say, a rule requiring new scrubbers on smokestacks is worth the price of implementation.

This week, as Congress continues to work to approve legislation that will prevent the lights from going out in Washington, legislators would be wise to leave blocks to EPA’s new clean-air rules out of their negotiations.

While many stipulate that these measures will further deflate an already sagging economy, in reality, they will have little, if any, negative economic impact. In fact, if the rules are allowed to stand, as it seems they will be, their benefit will far exceed their cost.

In a similar way, the dean of NYU’s law school, Richard Revesz, and his colleague Michael Livermore argue that the REINS Act puts undue emphasis on the “costs” of regulation. On the Huffington Post, they write:

“By focusing exclusively on the downsides of regulation, and not the benefits, the implication of this proposed legislation is that protecting the health and safety of Americans is not worth the costs that regulated entities must pay. But in fact, the opposite is often true: These rules can produce billions of dollars in net benefits.”