Consistency and Transparency in Environmental Cost-Benefit Analysis

Cost-benefit analysis has long played a central—yet at times controversial—role in environmental regulation. The premise that the overall benefits created by a regulation should justify its costs seems simple enough on its face. Yet that premise—enshrined in Executive Order 12,866—sometimes comes into tension with specific statutory provisions, such as some parts of signature federal environmental laws in the United States, including the Clean Air Act. Now, a recent advance notice of proposed rulemaking (ANPRM) issued by the U.S. Environmental Protection Agency (EPA) has reignited debate over the role of cost-benefit analysis in developing regulations. In its ANPRM, EPA solicited public input on how the agency should define and consider costs and benefits when developing its regulations, with the stated aim of improving consistency and transparency in cost-benefit analysis. When then-EPA Administrator Scott Pruitt announced the ANPRM in June…

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