20 May 2021

EPA Rescinds Trump-Era Cost-Benefit Rule

On May 14, 2021, the U.S. Environmental Protection Agency (EPA) rescinded a rule issued during the Trump administration that changed how EPA calculated and presented the costs and benefits of rules under the Clean Air Act (CAA). Advanced on the ground of providing greater transparency, the rule had required EPA to determine the benefits that a new regulation provided directly, while separately valuing the “co-benefits” that would accrue by reducing other pollutants not covered by the new regulation. Industry had argued that EPA regulations should be based solely on the value of reducing the emissions it was authorized to regulate — while opponents argued the rule would ignore obvious benefits and justify weakening regulation.

EPA now calls the rule “inadvisable, not needed, and untethered to the CAA” and finds that the rule failed to explain why limits on the agency’s ability to conduct cost-benefit analyses were necessary. EPA also explains that the rule was unnecessary because EPA already conducts a cost-benefit analysis as part of CAA rulemaking when such analysis is required, and the rule “limited the EPA’s ability to rely on the best available science.”

EPA’s review of the rule was directed by President Joe Biden’s January 20, 2021, executive order titled “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.” Biden’s order specifically identified the Trump-era rule as one that “[is] or may be inconsistent with, or present obstacles to the [promotion and protection of public health and the environment].” Sidley previously reported on the January 20 executive order here.

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