In January, the Environmental Protection Agency (EPA) proposed a rule that would amend new source performance standards and emissions guidelines for large municipal waste combustors.
The Proposed Rule marks an important, and overdue, step in reducing harmful pollutants from municipal waste combustion. To ensure that EPA regulates in a manner that maximizes social welfare, without leaving potential net benefits on the table, the Institute for Policy Integrity submitted comments recommending that EPA conduct additional analysis. Specifically, we offered the following recommendations:
- EPA should rely on benefit-cost analysis, rather than cost-effectiveness analysis, when selecting among regulatory alternatives. Benefit-cost analysis is the more rigorous analytic approach and better enables selection of the regulatory option that maximizes net benefits. In selecting among regulatory alternatives, EPA should also assess the stringency of each pollutant (or pollutant grouping) distinctly, rather than tying the stringency of all but one pollutant together.
- EPA should conduct a more robust benefit-cost analysis to better identify the welfare-maximizing alternative. Specifically, EPA should make the following adjustments:
- Monetize the benefits of incremental mercury emissions reductions using its existing practices, or explain why it cannot.
- Apply a 2% discount rate reflecting current guidance and best practices.
- More robustly assess the relative distributional impacts of each alternative, including baseline environmental and health conditions in affected communities.
- Consider remaining unmonetized benefits using breakeven analysis, and identify whether all benefits—both monetized and unmonetized—of more stringent standards justify the incremental costs.