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Policy BriefAnalyzing EPA’s Vehicle-Emissions Decisions
Why Withdrawing the 2022-2025 Standards Is Economically Flawed
The Environmental Protection Agency sets greenhouse gas emissions standards for cars and light trucks, and it periodically reevaluates these standards to make sure that car manufacturers can comply. In April 2018, EPA withdrew its previous determination that standards for model year 2022–2025 vehicles were appropriate and would improve public welfare, now saying that more recent information suggests that the standards are too stringent. Our policy brief shows that EPA’s claim—that new information indicates that the assumptions underlying the previous determination are unrealistic—is not supported by the evidence. In fact, the opposite is the case. Recent trends in fuel prices, vehicle sales, automaker compliance, and safety all indicate that the existing 2022–2025 standards can be met at low cost while delivering large benefits to consumers and the economy. EPA’s decision to withdraw the standards will instead cause regulatory uncertainty that will hurt the automotive sector while also harming the environment.
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Academic Article/Working PaperRegulation and Distribution
Most regulations seek to improve social welfare, but maximizing overall welfare may not help or protect all groups evenly. Many economists suggest handling unequal regulatory effects through the tax system. But some harms—like the disproportionately high environmental pollution felt by poor and minority communities and loss of the employment base in rural communities due to shifts in the economy—cannot be addressed by monetary compensation alone. A new article by Richard Revesz, published in the NYU Law Review, offers a blueprint for establishing a standing, broadly constituted interagency body charged with addressing serious negative consequences of regulatory measures on particular groups.
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ReportSelf-Bonding in an Era of Coal Bankruptcy
Recommendations for Reform
Federal law requires coal companies to reclaim and restore land and water resources that have been degraded by mining. But at many sites, reclamation occurs slowly, if it all. Mining companies are required to post performance bonds to ensure the successful completion of reclamation efforts should they become insolvent, but regulators have discretion to accept “self-bonds,” which allow many companies to operate without posting any surety or collateral. As the coal industry experiences financial distress and coal companies declare bankruptcy, the viability of future reclamation work is endangered. This report offers recommendations to help regulators better assess coal companies’ financial health and take steps to curtail self-bonding.
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Academic Article/Working PaperCost-Benefit Analysis and the Structure of the Administrative State
The Case of Financial Services
The viability and desirability of conducting cost-benefit analysis of financial regulation is a subject of intense academic debate. Opponents claim that such analysis is feasible for environmental regulation but not for financial regulation because of the difference in the benefits that require monetization in the respective areas. This article, which will be published in a forthcoming edition of the Yale Journal on Regulation, argues that the recent debate misses an important part of the problem. In large part, cost-benefit analysis of financial regulation cannot currently be performed successfully because of institutional shortcomings, not analytical difficulties. Compared to Executive Branch agencies, independent agencies, like the major financial regulatory agencies, lack the capacity to do cost-benefit analyses of acceptable quality. Fortunately, there are good Executive Branch models that could be exported to the financial regulatory agencies.
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ReportSupporting Survivors
The Economic Benefits of Providing Civil Legal Assistance to Survivors of Domestic Violence
Evidence indicates that the social costs of domestic violence extend far beyond the private costs borne by victims and their immediate families. Supporting Survivors analyzes the social costs of this public health problem and explores civil legal aid efforts, which have been shown to reduce rates of domestic violence by helping victims obtain protective orders and other services.
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