View Rule

EPA is considering developing implementing regulations that would increase consistency across EPA divisions and offices, increase reliability to affected stakeholders, and increase transparency during the development of regulatory actions. Many EPA statutes, including the Clean Air Act and the Clean Water Act, provide language on the consideration of benefits and costs, but these have historically been interpreted differently by the EPA depending on the office promulgating the regulatory action. This has led to EPA choosing different standards under the same provision of the statute, the regulatory community not being able to rely on consistent application of the statute, and EPA developing internal policies on the consideration of benefits and costs through non-transparent actions. EPA issued an Advance Notice of Proposed Rulemaking in June 2018. The Agency is now reviewing comments received to determine if developing implementing regulations through a notice-and-comment rulemaking process or other action could provide the public with a better understanding on how EPA weighs benefits and costs when developing a regulatory action and allow the public to provide better feedback to EPA on potential future proposed rules.

Statement of Need:

EPA implements many environmental statutes, including the Clean Air Act, Clean Water Act, the Safe Drinking Water Act, the Resource Conservation Recovery Act, etc. All these laws provide statutory direction for making regulatory decisions. EPA has applied varied and sometimes inconsistent interpretations of these statutory directions with respect to the consideration of costs and benefits in regulatory decision making. In doing so, EPA has created regulatory uncertainty, making planning decisions difficult and clouded the transparency of EPA decision making.

Summary of the Legal Basis:

EPA is considering developing a foundational rule (or series of rules) to better clarify EPA's interpretation of costs and benefit considerations discussed in existing statutes. The rule would be proposed using the existing authority provided in each of the statutes providing regulatory authority to EPA (e.g., Clean Air Act).

Alternatives:

Alternatives have not yet been developed for this action. Alternatives will be developed following review of public comments received on the Advanced Notice of Proposed Rulemaking.

Anticipated Costs and Benefits:

This rule is fundamentally different than regulations that place limits on pollution or otherwise clean the environment. It will not directly lead to changes in environmental quality. However, by improving the transparency and clarity of EPA's interpretation of when and how benefits and costs are considered in decision making, EPA will provide greater regulatory certainty that will allow regulated entities to better plan for future regulatory requirements. It may also enhance the utilization of benefit-cost analysis in decision making.   EPA plans to provide a full discussion and exposition of anticipated benefits and costs of regulatory approaches if the rule(s) go forward.

Risks:

In this action, EPA is examining the role of benefits, costs and other economic analytic concepts play in decision making, not the instructions on how to conduct economic analysis as contained in OMB Circular A-4 or EPA's Guidelines on Performing Economic Analysis. Consequently, assessment of costs and benefits will be addressed under subsequent rulemakings developed to tackle specific pollutants.