New Episode of Resources Radio: Has Good Benefit-Cost Analysis Been Swept under the MATS?, with Mary Evans and Matthew Kotchen

WASHINGTON, DC—Resources for the Future (RFF) today released a new installment of Resources Radio: “Has Good Benefit-Cost Analysis Been Swept under the MATS?, with Mary Evans and Matthew Kotchen.”

In this episode, host Kristin Hayes talks with Mary Evans of Claremont McKenna College and Matthew Kotchen of Yale University. Evans and Kotchen—both environmental economists and members of the External Environmental Economics Advisory Committee (E-EEAC), which uses economic research to provide evidence-based, nonpartisan counsel about EPA policies—explore the flawed analysis underlying EPA’s recently updated evaluation of Mercury and Air Toxic Standards (MATS). Expounding on a recent article in Science, which they coauthored with RFF Senior Fellow Karen Palmer and RFF University Fellow Joseph Aldy, Evans and Kotchen contend that EPA’s push to revise MATS relies on data that underestimates the benefits of reduced pollution and does not sufficiently consider how the declining use of coal has impacted regulatory costs.

Listen here.

Notable quotes from the podcast:

• How a small regulatory shift could hinder implementation of MATS: “[In] 2019, the Trump EPA issued a proposal to rescind that “appropriate and necessary” determination for [MATS]. And in rescinding that determination, that would remove the legal basis for the rule. So while it's technically not a rollback, it would in effect be a rollback. It would make the rule or compliance with the rule subject to challenge in the courts.” —Mary Evans (7:33)
• The change in estimated benefits with EPA’s revised assessment of MATS: “In the case of MATS, what has the Trump EPA done differently? … They didn't start anew and redo a benefit-cost analysis. What they did was they reproduced the benefits and costs from EPA’s original benefit-cost analysis completed back in 2011, with one major exception. And that was the elimination—the complete elimination—of co-benefits … It essentially changed the bottom line of the benefit-cost comparison from one in which benefits far exceeded costs to the reverse.” —Mary Evans (12:46)
• Changing energy landscape complicates benefit-cost analysis: “What the agency did in their more recent analysis in support of their proposed rule was not conduct a new benefit-cost analysis, but just go back in time eight years and reinterpret the numbers that they estimated in that earlier analysis. Since that time, we've had tremendous change—in particular, in the way that we generate electricity in the United States … It turns out that it's been much less costly to comply with the regulation than was originally anticipated.” —Matthew Kotchen (21:20)
• Bigger risks of using flawed data to justify regulatory rollbacks: “EPA over the past three or four decades has made tremendous strides and, in many ways, is a leader among the government agencies for doing rigorous economic analysis and cost-benefit analysis … I fear that some of these types of moves that have been coming out of the Trump administration recently are basically going to undermine the credibility of the agency.” —Matthew Kotchen (26:00)