Special Topics in Environmental Management

SAB Flags Concerns with EPA’s Proposed Changes to Clean Air Act Cost-Benefit Analysis

The Scientific Advisory Board (SAB) of the EPA announced a draft report critical of some of the Agency’s proposed changes to its cost-benefit analysis procedures under its Clean Air Act (CAA) program.

The SAB was created by Congress in 1978 to review EPA actions to see if they align with established science.

In its September 15, 2020, meeting, the SAB’s board members largely backed the findings in the draft report detailing concerns with the cost-benefit analysis procedures. The draft report also suggests that some of the provision’s proposals might be better addressed in guidance.

The EPA has indicated that it hopes to finalize the rule and publish it in November before the end of President Donald Trump’s first term, meaning SAB panelists don’t have a lot of time to comment on the proposal.

“We have a very short deadline to complete this report,” SAB Chairman Michael Honeycutt said “We want to complete it by the end of September.”

Opponents of the proposed changes have criticized the Agency, calling for separate quantifications of direct benefits and co-benefits, or those indirect benefits such as lives saved due to decreased air pollution.

“This proposal doesn’t clearly say that it would require—or even allow—EPA to ignore co-benefits, but Administrator Wheeler has publicly stated that under this proposal ‘[c]o-benefits would not be used to justify the rule,’” according to the Environmental Law & Policy Center. “And in a recent rulemaking, EPA ignored thousands of yearly deaths prevented by reduced particulate matter pollution because these avoided deaths were co-benefits of a rule intended to reduce mercury pollution from power plants. It’s illogical that saving a life is worth nothing if it’s saved as a side effect of a regulation intended to prevent different harms.”

The issues involving co-benefits did not receive much attention in the SAB draft review, although the precise application of co-benefit analyses is under review in separate pending revisions to the EPA’s economic review guidelines. SAB members have said this separate economic review has complicated their deliberations, as they do not wish to yield conflicting requirements.

The SAB draft flagged concerns about the proposed rule in three areas:

  1. Requirements for estimation of regulatory benefits: “EPA should clarify and strengthen the estimation of benefits in the proposed rule by incorporating systematic review approaches, better defining causality, and including effects for which causal or likely causal relationships may be less certain.”
  2. Proposed criteria for quantifying “health endpoints” in cost-benefit analysis: “EPA should clarify and strengthen recommendations on the selection of health endpoints, especially with regard to the selection of concentration response functions.”
  3. Treatment of uncertainty: “EPA should clarify and strengthen the requirements for uncertainty analysis in the proposed rule by better aligning the rule language with current best practices, better incorporating low probability, high-consequence hazards, and clearly noting when unquantified benefits or costs could be significant.”

“The [drafting] committee has done a good job … but once again we have been given a flawed rule we have been asked to correct rather than addressing the more central question of whether this rule should exist at all,” said Mark Wiesner, SAB board member and Duke University’s James B. Duke distinguished professor of civil and environmental engineering.

Board members indicated they would like to add language to their report to clarify that cost-benefit analyses do not always result in “yes” or “no” answers regarding the benefits of a specific CAA regulation.

The SAB board also plans to make revisions to the language regarding uncertainty analysis, as the current language in the draft report appears to unequivocally endorse uncertainty analysis when SAB concludes that there are times when a full-scale uncertainty analysis is counterproductive.

During the meeting, EPA SAB Staff Office Director Tom Brennan said members and the public can expect a Federal Register notice in a “week or two” announcing an upcoming meeting on the SAB’s draft report on the guidelines, with the draft SAB review of the economic guidelines made available when the notice goes out.