On June 4, 2020, U.S. EPA proposed a rule to improve the consistency and transparency of benefit cost analyses (BCAs) for all “significant” proposed and final regulations under the Clean Air Act (CAA). The proposed rule, developed in response to comments on U.S. EPA’s June 12, 2018 Advance Notice of Proposed Rulemaking and Administrator Wheeler’s May 13, 2019 memorandum outlining certain principles for increasing consistency and transparency in U.S. EPA’s consideration of benefits and costs in the rulemaking process, would codify the procedural requirements governing the development of BCA, including risk assessments used as inputs to the BCA, for significant rulemakings conducted under the CAA, and would establish additional procedural requirements to increase transparency in the presentation of the benefits resulting from significant CAA regulations.
U.S. EPA’s proposal consists of three key elements:
1. U.S. EPA will prepare a BCA for all future “significant” proposed and final regulations under the CAA. The proposal defines a “significant regulation” as a proposed or final regulation that is determined to be a “significant regulatory action” pursuant to E.O. 12866 Section 3(f) or is otherwise designated as significant by U.S. EPA. In its proposal, U.S. EPA notes that such regulations are generally those having the largest annual impact on the economy (i.e. greater than $100 million).
2. The BCA will be developed using the best available scientific information and in accordance with best practices from the economic, engineering, physical, and biological sciences. Under U.S. EPA’s proposal, the key elements of a regulatory BCA include: 1) a statement of need; 2) an examination of regulatory options; and 3) to the extent feasible, an assessment of all benefits and costs of these regulatory options relative to the baseline (no action) scenario.
3. Procedural requirements will be followed to increase transparency in the presentation of the BCA results, while maintaining the standard practices of measuring net benefits consistent with E.O. 12866. Specifically, U.S. EPA proposes that BCA of significant CAA regulations include, at a minimum, a detailed explanation of the overall results of the BCA, how the benefits and costs were estimated, all non-monetized and non-quantified benefits and costs of the action, and the primary sources and potential effects of uncertainty. U.S. EPA also proposes to make the information that was used in the development of the BCA, including data and models, publicly available (to the extent permitted by law).
A pre-publication version of U.S. EPA’s proposed BCA rule for significant CAA regulations (40 CFR Part 83) can be viewed here. Comments must be submitted within 45 days after the proposed rule is published in the Federal Register.