Over the past two decades, there has been considerable debate about the merits of using benefit-cost analysis to analyze environmental and safety regulations. A new project at Resources for the Future is drawing on economic, legal, and administrative expertise in order to transform that debate into a dialogue, with the goal of improving federal regulatory analysis. Involving both proponents and critics of benefit-cost analysis, the initiative - Alternative Approaches to Regulatory Impact Analysis - will culminate in a book to be published in early 2009 as a new administration takes office.
Leaders of the effort are RFF Senior Fellows Winston Harrington and Richard Morgenstern and Georgetown University Law Professor Lisa Heinzerling, a member of the Center for Progressive Reform, a nonprofit research organization of university-affiliated academics with expertise in the legal, economic, and scientific issues related to regulation of health, safety, and the environment.
At a June 6 RFF workshop, a group of federal officials, economists, and legal experts met to discuss three case studies and consider the lessons they offer for improvements to regulatory impact analysis.
Workshop participants debated the impact over the past 25 years of executive orders requiring benefit-cost and other analyses of influential rulemakings. The three cases under study are:
- The Clean Air Interstate Rule, promulgated by EPA in 2005, which is intended to reduce power plant emissions of sulfur dioxide and nitrogen oxides that travel across state lines.
- The Clean Air Mercury Rule, also announced by EPA in 2005, designed to permanently cap and reduce mercury emissions from coal-fired power plants.
- The Cooling Water Intake Rule (Phase II), issued by EPA in 2004, seeks to control surface water used as a coolant in electrical power plant generators.
Based on their continuing discussions, project leaders expect to formulate a set of recommendations (to be included in the book) that can help guide future regulatory analyses.