Regulatory Reform

AF&PA Welcomes SCOTUS Ruling on Good Neighbor Ruling and Chevron Deference

CCozort — Fri, 28 Jun 2024 19:18:46 +0000

AF&PA Welcomes SCOTUS Ruling on Good Neighbor Ruling and Chevron Deference

CCozort Fri, 06/28/2024 - 15:18

WASHINGTON – The American Forest & Paper Association (AF&PA) President and CEO Heidi Brock issued the following statement on the Supreme Court’s recent decisions to stay the Environmental Protection Agency’s “Good Neighbor” plan and overturn the longstanding Chevron precedent:

“The U.S. Supreme Court rulings are significant for the U.S. pulp and paper industry. Without the stay, AF&PA members would have faced hundreds of millions in unrecoverable costs to comply with the Good Neighbor Plan while the litigation continues.

"This rule was based on controls that were neither proven nor cost-effective, and the Supreme Court ruling affirms that position.

"Furthermore, we appreciate the Supreme Court’s decision overruling Chevron as contrary to the U.S. Constitution and the Administrative Procedure Act, as explained in our amicus brief with the American Farm Bureau Federation and others.

“We hope that this focus on courts’ constitutional role to interpret the law, while respecting agency expertise, will lay the foundation for sustainable regulation that withstands the test of time."

Washington State Water Quality Comparable Risks

superuser — Mon, 02 Aug 2021 18:12:32 +0000

Washington State Water Quality Comparable Risks

People are exposed to risks in many ways every day and some are more likely than others, and there are many regulatory programs to address those risks. The comparable risk chart helps explain how EPA's new risk policy for Washington state's water quality is more strict than several other programs.

superuser Mon, 08/02/2021 - 14:12

Modernize Air Permitting To Enable Manufacturing

superuser — Mon, 02 Aug 2021 18:10:46 +0000

Modernize Air Permitting To Enable Manufacturing

This chart helps identify ways EPA could make improvements to the air permitting process and implementation tools.

superuser Mon, 08/02/2021 - 14:10

AF&PA Calls for Veto of Maryland Renewable Energy Portfolio Standard (RPS) Legislation

superuser — Thu, 15 Apr 2021 16:22:25 +0000

AF&PA Calls for Veto of Maryland Renewable Energy Portfolio Standard (RPS) Legislation

superuser Thu, 04/15/2021 - 12:22

CONTACT: Tim Ebner

(202) 463-2436, comm@afandpa.org

WASHINGTON — The American Forest & Paper Association (AF&PA) President and CEO Heidi Brock issued the following statement in opposition to the Maryland General Assembly's efforts to alter the state's definition of qualifying biomass in the renewable energy portfolio standard (RPS):

"The forest products industry in Maryland produces almost $1.8 billion in products annually, employing approximately 6,000 people who work in facilities that produce essential products. The bioenergy from forest products manufacturing residuals is a carbon neutral, renewable energy that provides enormous greenhouse gas emission reduction benefits - roughly the equivalent to removing 35 million cars from the road.

Unfortunately, the Maryland General Assembly recently passed legislation (SB 65) that redefines qualifying bioenergy under the state's renewable energy portfolio standard (RPS). Not only will this result in fragmented energy policy that could harm the most economically disadvantaged Maryland citizens, but it will also cause major price disruptions for Maryland's electricity grid when nearly one-quarter of the current energy sources are removed from eligibility. The American Forest & Paper Association (AF&PA) believes RPS policies should be based on sound science and sustaining economic and business certainty. We encourage Governor Hogan to veto this shortsighted legislation to avoid unintended consequences to Maryland's environment, economy and taxpayers."

Press Release

Energy & Environment

Regulatory Reform

AF&PA Commends EPA on Finalizing New Source Review Project Emissions Accounting Rule

superuser — Fri, 23 Oct 2020 03:02:23 +0000

AF&PA Commends EPA on Finalizing New Source Review Project Emissions Accounting Rule

superuser Thu, 10/22/2020 - 23:02

CONTACT: Tim Ebner

(202) 463-2436, comm@afandpa.org

WASHINGTON – The American Forest & Paper Association (AF&PA) President and CEO Heidi Brock issued the following statement regarding the Environmental Protection Agency (EPA) New Source Review (NSR) project emissions accounting (PEA) rule, which was finalized today.

“The EPA recognizes the need for sensible NSR accounting procedures that will provide a clear and concise approach to air permitting under the Clean Air Act. The PEA rule, by allowing increases and decreases in emissions to be counted together, will exclude minor projects from a burdensome and time-consuming permitting process. This NSR rule is part of a broader EPA effort to modernize an antiquated and complicated system and ensure the global competitiveness of American manufacturing. AF&PA commends the EPA’s efforts to advance regulatory process reforms, such as this, to support our industry’s ability to innovate, invest and create American manufacturing jobs.”

Press Release

Air

Regulatory Reform

Biomass, Recycling, Regulatory Reform, Transportation Infrastructure Top AF&PA 2020 Advocacy Priorities

superuser — Fri, 14 Feb 2020 16:32:41 +0000

Biomass, Recycling, Regulatory Reform, Transportation Infrastructure Top AF&PA 2020 Advocacy Priorities

superuser Fri, 02/14/2020 - 11:32

CONTACT: Lindsay Murphy
(202) 463-2436, comm@afandpa.org

WASHINGTON – The American Forest & Paper Association (AF&PA) Board of Directors today announced advocacy priorities the association will pursue to ensure the pulp, paper, packaging, tissue and wood products industry’s continued growth and ability to create American manufacturing jobs.

“President Trump and the U.S. Congress recently made great strides in finalizing the U.S. – Mexico – Canada (USMCA) trade agreement, and we are grateful for this commitment to ensuring free and fair cross-border trade,” said AF&PA President and CEO Heidi Brock. “Paper and paper-based packaging are the most-recycled materials by weight from municipal waste streams in the United States, and AF&PA will support policies that allow this environmental success story to continue. Policy conversations related to biomass, paper recycling, regulatory reform and transportation infrastructure should strengthen our industry’s ability to provide consumers with recyclable, renewable and sustainable paper products.”

Mark Sutton, International Paper CEO and AF&PA Board Chair, continued, “The paper industry has some of the most comprehensive set of quantifiable sustainability goals of any U.S. manufacturing industry in Better Practices, Better Planet 2020. It is imperative the U.S. Congress, state legislatures and other stakeholders recognize the industry as a top 10 manufacturing employer in 45 states across the country, with an impressive track record of leadership in environmental and forest stewardship. As challenges related to waste continue to be discussed nationwide, we ask that elected officials recognize paper is part of the circular solution.”

AF&PA’s 2020 advocacy priorities are:

Carbon Neutrality of Biomass: Paper and wood products manufacturers use as much of the tree as possible to make paper, packaging and wood products, while remaining residuals are used as a renewable energy source (biomass) to power mills. The carbon neutrality of biomass harvested from sustainably-managed forests has been repeatedly recognized by studies, agencies, institutions, legislation and rules around the world. AF&PA has for many years advocated for science-based policies that acknowledge the carbon neutrality of biomass and provide regulatory certainty to level the playing field for global competition and the protection of rural American jobs.

Continued Success for Paper Recycling at the State and Federal Level: Efforts to ban, tax or restrict access to paper products discourages the use of products that are recyclable, compostable, reusable and made from renewable and recycled material. AF&PA supports Senators Rob Portman (R-OH) and Debbie Stabenow’s (D-MI) RECYCLE Act, which recognizes that educating consumers on the right ways to recycle is one of the best ways we can increase the quantity and quality of paper in the recycling stream.

Regulatory Reform: U.S. paper and wood products manufacturers have spent billions of dollars on regulatory compliance and are estimated to spend billions in new capital expenditures over the next decade. Measures that streamline the permit process and reduce cost and uncertainty of regulations remain a top priority.

Transportation Infrastructure: Paper and wood products manufacturers face a nationwide shortage of transportation capacity, an aging infrastructure, and inefficient surface transportation policies. As a result, connecting our products, raw materials and consumers is difficult and costly. Specifically, AF&PA encourages necessary infrastructure enhancements, increasing truck weight limits on federal interstate highways and freight rail system reforms that prioritize shippers’ concerns.

In addition to these priorities, AF&PA remains engaged in important advocacy discussions related to international trade and climate policy.

AF&PA Commends EPA Action to Balance Benefits and Costs

superuser — Wed, 22 May 2019 02:01:33 +0000

AF&PA Commends EPA Action to Balance Benefits and Costs

superuser Tue, 05/21/2019 - 22:01

CONTACT: Lindsay Murphy/Barbara Riley
(202) 463-2436, comm@afandpa.org

WASHINGTON – American Forest & Paper Association (AF&PA) President and CEO Donna Harman issued the following statement regarding the Environmental Protection Agency’s (EPA) memorandum outlining plans to implement robust benefit-cost analysis across the agency’s rulemaking process. The memorandum follows the agency’s June 2018 advanced notice of proposed rulemaking regarding the benefits and costs of rulemaking and indicates the process will begin with the Clean Air Act.

“We applaud EPA for taking the historic step to advance common-sense regulatory policy that ensures its regulations will do more good than harm. For over 38 years, every president has directed regulatory agencies to embrace this sound principle when designing regulations. But Administrator Wheeler breaks new ground with plans for binding regulations to ensure that the benefits of EPA’s regulations will justify the costs. We welcome this new foundation for sustainable regulation and the news that similar regulations under other EPA statutes will follow the Clean Air Act rulemaking. All will serve to protect the environment while allowing the economy to grow and create new opportunities for all Americans long into the future.”

Press Release

Regulatory Reform

The Paradigm Shift in the Cost-Benefit State: Requiring More Good Than Harm

superuser — Tue, 21 May 2019 17:55:50 +0000

The Paradigm Shift in the Cost-Benefit State: Requiring More Good Than Harm

superuser Tue, 05/21/2019 - 13:55

The U.S. Environmental Protection Agency (EPA) took an historic step to advance the “cost-benefit state,” the paradigm in which “government regulation is increasingly assessed by asking whether the benefits of regulation justify the costs of regulation.”[1] EPA Administrator Andrew Wheeler issued a memorandum directing agency staff to ensure “the agency balances benefits and costs in regulatory decision-making.”[2] He further directed the heads of each office – air, water, solid waste, and chemical safety – to develop a media-specific notice-and-comment rulemaking on how benefit-cost balancing and analytical best practices will be applied under each statute, starting with the air office, which will propose a regulation later this year.

Reasonable minds can agree that the goal of regulation is to enhance, not undermine, societal well-being. For over 38 years, every president has ordered executive agencies like EPA to consider important tradeoffs and to regulate only if the benefits justify the costs. As the Clinton administration put it:

“The only way we know how to distinguish between regulations that do good and those that do harm is through careful assessment and evaluation of their benefits and costs. Such analysis can also often be used to redesign harmful regulations so they produce more good than harm and redesign good regulations so they produce even more net benefits.”[3]

As an alumnus of the White House Office of Information and Regulatory Affairs (OIRA) that reviews regulatory proposals, I wholeheartedly support the presidential orders to do more good than harm. I also believe the status quo is inadequate due to the institutional limitations of the agencies and OIRA (e.g., bureaucratic turf battles, failure to utilize both internal and external expertise, bias and the mismatch between the vast volume of regulation and OIRA’s shrinking resources), and political dysfunctions (e.g., inconsistent support for OIRA by varying administrations, interest group rent-seeking and presidential electoral politics).[4]

One of the greatest yet most readily addressable impediments to the cost-benefit state that I have seen first-hand is that agencies too often have interpreted their statutes to impede benefit-cost balancing despite the presidential directive to do more good than harm.[5] Yet, the statutory text typically does not prohibit benefit-cost balancing and thus does not require or authorize non-compliance with the presidential orders.[6] Moreover, alternatives to benefit-cost analysis, such as feasibility analysis, are inferior tools for enhancing societal well-being. Feasibility analysis involves regulating any significant risk to the extent technologically or economically feasible, while benefit-cost analysis seeks to maximize societal well-being. Compelling evidence shows that feasibility analysis lacks a normative justification, can just as easily lead to under-regulation as to over-regulation, and should have no place in government regulation.[7]

The Supreme Court has clarified that EPA and other agencies can fully implement most regulatory statutes through benefit-cost balancing, not just feasibility analysis, and doing so can avoid an arbitrariness challenge.[8] EPA’s initiative would take the next step by committing the agency to do more good than harm through binding regulations. This could overcome current impediments and greatly improve the efficiency, effectiveness and accountability of EPA’s regulations.

Although I believe other agencies should follow, EPA is a good agency to lead by example. EPA’s regulations account for about 70 percent of the monetized costs and 80 percent of the monetized benefits of all regulations by the executive agencies.[9] EPA also is among the most experienced and qualified agencies at estimating costs and benefits, but there is ample room for improvement, as the National Academy of Sciences and OIRA have stated.[10]

Inside the politically polarized Capital Beltway, it will come as no surprise if critics attack this initiative (just like the first benefit-cost executive order by President Reagan). But an evidence-based regulatory system can be a salutary antidote to political polarization. Important rules that can save lives and protect our health and environment are the very rules that can pass benefit-cost analysis with flying colors.[11]

The importance of EPA both clarifying its authority to implement regulatory statutes through benefit-cost balancing and channeling its discretion to do more good than harm should not be underestimated. Most environmental statutes (like most other regulatory statutes) are silent or ambiguous on benefit-cost balancing. Fully embracing the first principle to do more good than harm is long overdue. EPA can be a leader on sustainable regulation.

Paul Noe is Vice President for Public Policy at the American Forest & Paper Association. From 2001 – 2006, he served as Counselor to Administrator John Graham in OIRA, where he worked on the benefit-cost approach in the EPA regulation upheld by the Supreme Court in Entergy v. Riverkeeper.

[1] Cass R. Sunstein, The Cost-Benefit State: The Future of Regulatory Protection, American Bar Association Section of Administrative Law and Regulatory Practice, Chicago, IL (2002).

[2] https://www.epa.gov/environmental-economics/administrator-wheeler-memorandum-increasing-consistency-and-transparency

[3] Office of Management and Budget, Office of Information and Regulatory Affairs, Report to Congress on the Costs and Benefits of Federal Regulation (Sept. 30, 1997), at 10.

[4] See, e.g., John D. Graham and Paul R. Noe, “Beyond Process Excellence: Enhancing Societal Well-Being,” in Achieving Regulatory Excellence, Brookings Institution Press, Washington, DC, 2017, pp. 72 – 87; Paul R. Noe, “Crossing the Regulatory Divide to Enhance Societal Well-Being,” The Regulatory Review, University of Pennsylvania Law School (Aug. 28, 2018).

[5] See, e.g., Paul R. Noe, “Crossing the Regulatory Divide to Enhance Societal Well-Being,” The Regulatory Review, University of Pennsylvania Law School (Aug. 28, 2018); John D. Graham and Paul R. Noe, “A Paradigm Shift in the Cost-Benefit State,” RegBlog, University of Pennsylvania Law School (April 26, 2016); John D. Graham and Paul R. Noe, “A Reply to Professor Sinden’s Critique of the ‘Cost-Benefit State,’” RegBlog, University of Pennsylvania Law School (Sept. 27, 2016).

[6] Id.

[7] See, e.g., Jonathan S. Masur & Eric A. Posner, “Against Feasibility Analysis,” 77 U. Chicago L. Rev. 657 (2010), cited in John D. Graham and Paul R. Noe, “A Reply to Professor Sinden’s Critique of the ‘Cost-Benefit State,’” RegBlog, University of Pennsylvania Law School (Sept. 27, 2016).

[8] See Entergy Corp. v Riverkeeper, Inc., 556 U.S. 208 (2009) (EPA has broad discretion to implement a statute through benefit-cost balancing); Michigan v. EPA, 576 U.S. __, 135 S. Ct. 2699 (2015) (EPA’s refusal to consider cost in determining whether regulation was “appropriate and necessary” is arbitrary and capricious); see also, Paul R. Noe, “Crossing the Regulatory Divide to Enhance Societal Well-Being,” The Regulatory Review, University of Pennsylvania Law School (Aug. 28, 2018); John D. Graham and Paul R. Noe, “A Paradigm Shift in the Cost-Benefit State,” RegBlog, University of Pennsylvania Law School (April 26, 2016); John D. Graham and Paul R. Noe, “A Reply to Professor Sinden’s Critique of the ‘Cost-Benefit State,’” RegBlog, University of Pennsylvania Law School (Sept. 27, 2016).

[9] See U.S. Office of Information and Regulatory Affairs, Office of Management and Budget, 2017 Draft Report to Congress on the Benefits and Costs of Federal Regulations and Agency Compliance with the Unfunded Mandates Reform Act (Feb. 23, 2018), at 12 (https://www.whitehouse.gov/wp-content/uploads/2017/12/draft_2017_cost_benefit_report.pdf) (“OMB 2017 Report”).

[10] OMB 2017 Report, at 12-18 (identifying the assumptions underlying EPA’s benefits calculations, and noting that to the extent any is incorrect, the benefit ranges could be significantly different. OMB also “recommended that EPA begin to develop approaches to monetize and more explicitly consider the implications of these sources of uncertainty in its benefits and co-benefits analyses.” Id. at 18. See also, National Research Council, Estimating the Public Health Benefits of Proposed Air Pollution Regulations, The National Academies Press, Washington, DC (2002) (https://doi.org/10.17226/10511); Institute of Medicine of the National Academies of Sciences, Valuing Health for Regulatory Cost-Effectiveness Analysis, The National Academies Press, Washington, DC (2006), at 150-51, 156, 178-80 (https://doi.org/10.17226/11534).

[11] See, e.g., John D. Graham, “Saving Lives Through Administrative Law and Economics,” 157 U. Pa. L. Rev. 395, 465-81 (2008) (providing examples of beneficial EPA regulations); Economic Analyses at EPA, Richard D. Morganstern, Editor, Resources For the Future Press, Washington, DC (1997) (providing case studies on EPA’s use of benefit-cost analysis on rules such as the removals of lead from gasoline and from drinking water, and finding the result was reduced regulatory costs and often increased benefits as well); U.S. Environmental Protection Agency, “EPA’s Use of Cost-Benefit Analysis: 1981-1986,” EPA-230-05-87-028 (Aug. 1987), p. 5-2 (“the return to society from improved environmental regulations is more than one thousand times EPA’s investment in cost-benefit analysis”).

Update in Brief

Regulatory Reform

Recycling, Transportation Infrastructure, Trade, Tax, Regulatory Process Reform Top AF&PA 2019 Advocacy Priority List

superuser — Tue, 08 Jan 2019 20:51:33 +0000

Recycling, Transportation Infrastructure, Trade, Tax, Regulatory Process Reform Top AF&PA 2019 Advocacy Priority List

superuser Tue, 01/08/2019 - 15:51

CONTACT: Barbara Riley
(202) 463-2436, comm@afandpa.org

WASHINGTON – The American Forest & Paper Association (AF&PA) announced that a more resilient paper recycling system, transportation infrastructure, international trade, tax policy, and regulatory reforms and process improvements top its 2019 advocacy priority list. The association will pursue these priorities as it supports the pulp, paper, packaging, tissue and wood products industry’s ability to grow and create American manufacturing jobs.

“Clear public policies that advance our industry’s ability to apply sustainable manufacturing practices to innovate, invest, compete and plan for the future top our 2019 advocacy priorities list,” said AF&PA President and CEO Donna Harman. “A market-based paper recycling system, improved transportation infrastructure, free and fair trade, a competitive tax system, and regulatory reforms and process improvements will go a long way toward helping our companies make the products that improve peoples’ everyday lives. By partnering with decision makers in Washington, D.C., state capitols and other stakeholders, we aim to move these measures forward and create new opportunity for economic growth and job creation in rural and urban communities across the nation.”

AF&PA’s top advocacy priorities for the coming year are:

A More Resilient U.S. Paper Recycling System: Paper, by weight, is the most-recycled material from municipal solid waste streams in the United States today, and our industry has met or exceeded a 63 percent recovery rate for paper and paper-based packaging for each of the last nine years. That success story stems from our industry’s voluntary investment to build a commercial paper recycling infrastructure as well as the commitment by millions of Americans who recycle at home, at work or at school every day. Policies that further a strong market for paper recycling and provide for the effective use of recovered materials to create jobs, reduce environmental impact and improve quality of life will have our support.

Transportation Infrastructure and Efficiency Improvements: Moving raw materials to mills and products to customers remains increasingly difficult and costly, hindering competition and preventing companies from contributing to economic growth. Safely increasing truck weight limits on federal interstate highways and freight rail system rate and service improvements are necessary steps to effectively address a nationwide shortage of transportation capacity and inefficiencies.

Free and Fair Trade: Free and fair trade policy must recognize our strong global position and is essential to our manufacturers’ ability to compete at home and around the globe. The recent signing of the U.S.-Mexico-Canada Agreement represents a positive step toward strengthening our industry’s products in the North American market. Our work will focus on ensuring the agreement preserves and improves market access and investor protections, such as investor-state dispute settlement procedures, which have long benefitted our industry and its workers.

Tax Policy: Our globally competitive tax code enables paper and wood products manufacturers to make investments that will support a robust future. We will defend the policy changes achieved in 2017 to ensure that our priorities are reflected in implementing regulations.

Regulatory and Process Reforms: Measures that streamline the permit process and reduce the cost and uncertainty of regulations, including implementation of federal biomass policy that appropriately reflects our industry’s use of carbon-neutral forest biomass for energy production, are long overdue. We will advocate for effective public policy that does more good than harm, stimulates innovation and sustainable development, encourages economic growth and job creation and builds public confidence in government.

AF&PA member companies continue to lead on sustainability performance. Our Better Practices, Better Planet 2020 initiative — one of the most extensive sets of sustainability goals for a U.S. manufacturing industry — remains a priority.

Smarter Regulation: Doing More Good Than Harm

superuser — Thu, 07 Jun 2018 17:46:14 +0000

Smarter Regulation: Doing More Good Than Harm

superuser Thu, 06/07/2018 - 13:46

The U.S. Environmental Protection Agency (EPA) has just taken a groundbreaking step to advance the eminently reasonable principle required by every president for over 37 years: In developing regulations, regulators should consider important tradeoffs and select regulatory options that do more good than harm.

On June 7, EPA issued an Advance Notice of Proposed Rulemaking (RIN 2010-AA12) requesting public comment on how EPA could be more consistent and transparent in considering societal benefits and costs when designing its regulations. Specifically, EPA may develop implementing regulations on how it will consider benefits and costs when interpreting its authorizing statutes and designing regulatory proposals. (Read ANPRM here.)

There is a longstanding bipartisan consensus that agencies should regulate only if the benefits justify the costs. As the Clinton administration put it:

“[R]egulations (like other instruments of government policy) have enormous potential for both good and harm. Well-chosen and carefully crafted regulations can protect consumers from dangerous products and ensure they have information to make informed choices. Such regulations can limit pollution, increase worker safety, discourage unfair business practices, and contribute in many other ways to a safer, healthier, more productive, and more equitable society. Excessive or poorly designed regulations, by contrast, can cause confusion and delay, give rise to unreasonable compliance costs in the form of capital investments, labor and on-going paperwork, retard innovation, reduce productivity, and accidentally distort private incentives.

The only way we know how to distinguish between regulations that do good and those that do harm is through careful assessment and evaluation of their benefits and costs. Such analysis can also often be used to redesign harmful regulations so they produce more good than harm and redesign good regulations so they produce even more net benefits.”^[1]

As an alumnus of the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) that reviews regulatory proposals, I wholeheartedly support the longstanding presidential orders requiring agencies -- to the extent permitted by law -- to regulate only if the benefits justify the costs.^{^[2]} But I also believe that the status quo is inadequate for many reasons, including the institutional limitations of the agencies and OIRA (such as bureaucratic turf battles, failure to utilize both internal and external expertise, bias and the mismatch between the vast volume of regulation and OIRA’s shrinking resources), as well as political dysfunctions (including inconsistent support for OIRA by varying administrations, interest group rent-seeking and presidential electoral politics).^[3] But one of the greatest yet most readily addressable impediments to smarter regulation is that regulatory agencies such as EPA too often have interpreted their statutes to limit their ability to fully engage in benefit-cost balancing and thus to comply with the presidential directives to do more good than harm.^[4] Yet, the actual text of the statutes typically does not prohibit benefit-cost balancing and thus does not require or authorize non-compliance with the presidential benefit-cost orders.

The good news is that recent case law -- especially the Supreme Court decisions in Entergy Corp. v. Riverkeeper, Inc. (2009)^[5] and Michigan v. EPA (2015)^[6] -- has made it quite clear that agencies have broad discretion to interpret statutes that are silent or ambiguous on benefit-cost analysis as permitting, not forbidding, this type of smarter regulation.^[7] Indeed, the logical corollary reflected in Michigan is that agencies that decline the invitation to do more good than harm could render their regulations vulnerable to an arbitrariness challenge.

While the use of benefit-cost analysis in developing regulations has enjoyed bipartisan support for many decades, in the politically polarized environment in Washington, D.C., it will come as no surprise if critics attack this initiative (just like the first benefit-cost executive order by President Reagan). But an evidence-based regulatory system can be a salutary antidote to political polarization. Important rules that can save lives and protect our health and environment are the very rules that can pass benefit-cost analysis with flying colors. Such rules may indeed be expensive, but unsurprisingly, they can deliver benefits well beyond their costs.^[8]

The importance of clarifying the authority of agencies to implement their statutes through benefit-cost balancing should not be underestimated. Most environmental statutes (like most other regulatory statutes) are silent or ambiguous on benefit-cost balancing. It is long overdue for EPA to carefully reexamine its statutory interpretations and implement its statutes through benefit-cost balancing, unless prohibited by law. This is an opportunity for EPA to be a leader on sustainable regulation.

Paul Noe is Vice President for Public Policy at the American Forest & Paper Association. From 2001 – 2006, he served as Counselor to Administrator John Graham in the Office of Information and Regulatory Affairs, Office of Management and Budget in the George W. Bush Administration.

^[1]^{Office of Management and Budget, Office of Information and Regulatory Affairs, Report to Congress on the Costs and Benefits of Federal Regulation (Sept. 30, 1997), at p. 10.}

^{[2] See, e.g., John D. Graham and Paul R. Noe, “A Paradigm Shift in the Cost-Benefit State,” RegBlog, University of Pennsylvania Law School (April 26, 2016); John D. Graham and Paul R. Noe, “A Reply to Professor Sinden’s Critique of the ‘Cost-Benefit State,’” RegBlog, University of Pennsylvania Law School (Sept. 27, 2016); Jonathan S. Masur & Eric A. Posner, “Against Feasibility Analysis,” 77 U. Chicago L. Rev. 657 (2010).}

^{[3] See John D. Graham and Paul R. Noe, “Beyond Process Excellence: Enhancing Societal Well-Being,” in Achieving Regulatory Excellence, Brookings Institution Press, Washington, DC, 2017, pp. 72 - 87.}

^{[4] See, e.g., John D. Graham and Paul R. Noe, “A Paradigm Shift in the Cost-Benefit State,” supra.}

^{[5] 556 U.S. 208.}

^{[6] 135 S. Ct. 2699.}

^{[7] See, e.g., John D. Graham and Paul R. Noe, “A Paradigm Shift in the Cost-Benefit State,” supra.}

^{[8] See, e.g., John D. Graham, “Saving Lives Through Administrative Law and Economics,” 157 U. Pa. L. Rev. 395, 465-81 (2008) (providing examples of beneficial EPA regulations such as emissions limits for coal-fired power plants); Economic Analyses at EPA, Richard D. Morganstern, Editor, Resources For the Future Press, Washington, DC (1997) (providing case studies on EPA’s use of benefit-cost analysis on rules such as the removals of lead from gasoline and from drinking water, and finding the result was reduced regulatory costs and often increased benefits as well); U.S. Environmental Protection Agency, “EPA’s Use of Cost-Benefit Analysis: 1981-1986,” EPA-230-05-87-028 (Aug. 1987), p. 5-2 (“the return to society from improved environmental regulations is more than one thousand times EPA’s investment in cost-benefit analysis”).}

Update in Brief

Regulatory Reform