Newsletters

February 28, 2017

• New Resources on Environmental Regulation for Journalists and Policymakers

  To help journalists and policymakers dissect common arguments against environmental regulation, we recently published a series of fact sheets on key regulatory issues. Our fact sheet on the Social Cost of Carbon details how this metric was developed and how it applies to federal regulatory policy. We circulated the fact sheet in conjunction with this week’s House hearing on the Social Cost of Carbon, which featured a number of confusing and misleading statements. Our fact sheet on Jobs and Environmental Regulation addresses rhetoric on “job-killing regulations,” describing the lack of consistent evidence that regulations lead to long-term changes in the unemployment rate. It also provides information on how to analyze claims about job impacts. David Roberts of Vox used our research as the basis for an article on jobs and regulation. Our fact sheet on Regulatory Co-Benefits analyzes the importance of using unbiased economic analysis to consider all direct and indirect costs and benefits of any environmental safeguard.

• A Subtle Attack on the Environment

  In a new op-ed for US News & World Report, Richard Revesz highlights some subtle approaches that the Trump administration has hinted it will take to attack environmental regulations. By tampering with the Social Cost of Carbon; ignoring the indirect benefits of regulations; or using misleading job impact estimates, the administration could make many safeguards appear to have few or no benefits and exaggerated costs. As a result, existing safeguards could be repealed or weakened, and new rules would be scrapped. Revesz notes that injecting bias into this economic analysis would damage the integrity of the regulatory process, threatening both economic efficiency and public wellbeing.

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  Comments to Massachusetts Department of Environmental Protection on Greenhouse Gas Reductions

  The Massachusetts Department of Environmental Protection (“MassDEP”) has proposed a set of regulations to limit the greenhouse gas emissions from electric power plants, natural gas pipelines, government-owned transportation equipment, and utility-owned switchgear equipment. MassDEP has also proposed a new requirement that retail sellers of electricity purchase gradually increasing amounts of clean energy, along with non-binding targets for greenhouse gas emissions from the transportation sector. In our comments to MassDEP, we offer three suggestions to ensure these regulations cut global greenhouse gas emissions in a cost-effective way. First, we encourage MassDEP to prevent potential emissions leakage to other states in the Northeast’s Regional Greenhouse Gas Initiative (“RGGI”) program. Second, we recommend that the regulations should be technology-neutral and use a flexible compliance system. Third, we recommend enforceable emissions limits on the transportation sector rather than non-binding targets, especially considering that the state’s emissions from the transportation sector are almost twice those of the electric sector.

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  Comments on Regulatory Review to OIRA

  President Trump’s recent executive order directed agencies to repeal two regulations for every new regulation, and to offset all incremental costs of new regulations. (We issued a statement on this deeply flawed order.) The Office of Information and Regulatory Affairs (OIRA) has since issued interim guidance on how it plans to implement the executive order, and we submitted comments on this guidance. We suggest that OIRA should implement the order in a way that allows agencies to carry out statutory obligations and follow judicial orders, focusing on “economically significant” actions to promote workability. OIRA should also clarify that repeals or modifications to non-significant regulations can generate cost offsets. Agencies should prioritize the repeal or modification of outdated, ineffective, and unnecessary regulations and develop plans for retrospective review in order to calculate the actual costs of regulation and identify candidates for cost-saving modifications. For future years, OIRA should set the total allowable regulatory budget by reference to net costs—that is, costs net of reasonable estimates of regulatory benefits, including difficult-to-quantify benefits.

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  In the News: NPR interview, New York Times

  Following President Trump’s executive order aiming to cut regulation, NPR interviewed Richard Revesz on the role of regulation in protecting public welfare. This half-hour conversation, which also featured Michael Mandel of the Progressive Policy Institute, covered the comparative effectiveness of different regulatory efforts. Revesz emphasized the important role that cost-benefit analysis can play in regulatory design and evaluation. The New York Times also quoted Revesz on a recent executive order seeking to weaken the Waters of the US Rule. “The executive order has no legal significance at all,” he said. “It does the same thing as a phone call or a tweet. It just signals that the president wants [a change] to happen.”

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  Remembering Kenneth Arrow

  Kenneth Arrow, a Nobel-Prize-winning economist whose work had a profound influence on microeconomics and social choice theory, passed away on February 21. His ideas on imperfectly competitive markets and externalities laid the economic groundwork for modern insurance markets, financial securities, and elements of medical care and public policy. Members of the Policy Integrity staff collaborated with Arrow on three projects. Arrow and several Policy Integrity scholars co-authored a 2014 article in Nature on the economic damages omitted from the Social Cost of Carbon estimate. He also penned a foreword for a 2015 Policy Integrity report on the benefits to the U.S. economy from foreign climate change mitigation efforts. Arrow’s final publication is a forthcoming, jointly authored piece in the Review of Environmental Economics and Policy on why a global value should be used in the federal government’s Social Cost of Carbon estimate. Richard Revesz said that his collaborations with Arrow were among the highlights of his career.