In January 2024, the Environmental Protection Agency (EPA) proposed a regulation under the Clean Water Act that would impose new effluent limitations guidelines and standards for the meat and poultry products point source category. As EPA documents, the proposed standards would help improve health and water quality near these slaughterhouse facilities. It would also carry benefits stemming from better-protected habitats for a variety of wild animals.
In our comment letter, we explain that, while the Proposed Rule and its accompanying regulatory impact analysis reasonably explain many of these benefits, EPA should take further steps to ensure the complete presentation of regulatory benefits and costs, along with their distribution, and to present its decisionmaking factors transparently. In particular, our letter explains that:
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EPA should enhance its presentation and discussion of net benefits. EPA reasonably proposes to regulate despite negative monetized net benefits—i.e., monetized costs that exceed monetized benefits—because many important categories of unquantified benefits exist. While EPA qualitatively describes many of the Proposed Rule’s benefits, EPA should enhance how it presents its comparison of benefits to costs to feature these unquantified benefits more prominently and specifically. It should also identify the option that maximizes net benefits, which may not be the option EPA proposes, even though the proposed option carries the highest monetized net benefits of the three.
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EPA should identify additional benefits associated with protecting wild animals. While the agency appropriately illustrates many benefits of reducing water pollution to wild animals and consequent benefits for humans, it should also recognize additional cascading impacts on both threatened and non-threatened terrestrial animals, based on the links between aquatic and terrestrial ecosystems and the services they provide.
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While EPA’s decision to relegate a 7% discount rate to an appendix is reasonable (indeed, per Circular A-4’s updated guidance, EPA need not use a 7% discount rate), the agency should use a 2% discount rate in its primary analysis rather than the outdated 3% rate.
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While EPA’s analysis of some benefit categories’ distribution provides a good starting place for a comprehensive distributional analysis, in line with the updated Circular A-4, the agency should analyze the distribution of costs, along with additional categories of benefits. It should assess which regulatory option is most distributionally desirable and explain its choice to forgo the most distributionally desirable option, if it does so. If missing data prevent a fuller distributional analysis, EPA should outline what would fill the relevant gap.
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EPA should use its updated estimates of the social cost of greenhouse gases in its primary analysis.