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White House draft report finds benefits of EPA regulations outweigh costs

A draft report released recently by the White House's Office of Management and Budget concluded that the benefits associated with regulations the U.S. Environmental Protection Agency issued between 2001 and 2015 vastly outweigh the associated costs.

The office's, or OMB's, draft annual report to Congress detailed the costs and benefits of federal regulations and found that rules issued by federal agencies generally are more beneficial than they are costly. That document, released Feb. 23, comes amid the Trump administration's call for regulatory reform, with a particularly intense focus on environmental rules issued by the EPA.

Overall, the report found that regulations reviewed by the OMB from October 1, 2006, to September 30, 2016, had aggregated benefits of between $287 billion and $911 billion and associated costs of between $78 billion and $115 billion, in 2015 dollars. Regardless of the report's finding, however, the OMB said the administration "will continue to place an emphasis on deregulation."

Many of the rules considered in the report were issued during the previous administration and currently are under reconsideration. The OMB analyzed rules that are expected to generate benefits or costs of $100 million or more in at least one year; therefore, the report stressed that the estimates are not a complete accounting of all the benefits and costs of all regulations issued by the federal government.

As for EPA regulations, the OMB examined 39 with benefits ranging from $195.8 billion to $705.7 billion compared to costs of $54.1 billion to $64.8 billion in 2015 dollars. Of those, 26 were issued by the EPA's Office of Air and Radiation, which handles Clean Air Act rules such as the Clean Power Plan; National Ambient Air Quality Standards; and Mercury and Air Toxics Standards, or MATS.

"Across the federal government, the rules with the highest estimated benefits as well as the highest estimated costs come from the Environmental Protection Agency," according to the report. In fact, the OMB said the EPA accounts for more than 80% of overall monetized benefits and 70% of costs for all the regulations examined. "Rules that have a significant aim to improve air quality account for over 95% of the benefits of EPA rules," the report said.

Of the 26 air and radiation office regulations examined, the 2007 Clean Air Fine Particle Implementation Rule and MATS accounted for the highest benefits but also the highest costs. MATS provided estimated benefits ranging from $33 billion to $90 billion with associated costs of about $9.6 billion, in 2007 dollars. OMB said MATS "is estimated to be the costliest of the EPA rules."

The draft annual report in general was presented in 2001 dollars in accordance with OMB policy, but in some instances figures were updated to reflect the value of the dollar in other years when appropriate. Agencies calculate the benefits of their activities in different ways, but the OMB generally considers a rule's impact on productivity, competition, jobs and the environment, as well as on public health and safety and on state, local, or tribal governments or communities.