Deep Dive Episode 160 – The Myths and Facts Regarding the EPA’s Benefit-Cost Analysis and Science Transparency Rules

The Environmental Protection Agency recently finalized two new transparency-related rules. The stated purpose of the rule “Increasing Consistency in Considering Benefits and Costs in the Clean Air Act Rulemaking Process” is “to codify procedural best practices for the preparation, development, presentation, and consideration of BCA in regulatory decision-making under the CAA.” The rule “Strengthening Transparency in Pivotal Science Underlying Significant Regulatory Actions and Influential Scientific Information” is intended to help shed light on the science used and disseminated by the agency. Both rules have garnered both praise and criticism, and there is significant confusion over what they would actually do. In this live podcast, subject-area experts discuss the rules and examine their likely real-world impact.


Although this transcript is largely accurate, in some cases it could be incomplete or inaccurate due to inaudible passages or transcription errors.



Micah Wallen:  Welcome to The Federalist Society’s teleforum conference call. This afternoon’s topic is a Teleforum on “The Myths and Facts Regarding the EPA’s Benefit-Cost Analysis and Science Transparency Rules.”


My name is Micah Wallen, and I am the Assistant Director of Practice Groups at The Federalist Society. As always, please note that all expressions of opinion are those of the experts on today’s call.


Today, we are fortunate to have with us our moderator, Daren Bakst, who is Senior Research Fellow at The Heritage Foundation. Daren will be introducing our panel today. After our panel has their opening remarks, we will then move to an audience Q&A. Thank you all for sharing with us today.


Daren, the floor is yours.


Daren Bakst:  Thank you, Micah. I want to thank all of you for calling into today’s teleforum. Over the last month, the EPA has finalized two important regulations that are designed, in large part, to promote transparency.


The first rule that was finalized in early December is entitled “Increasing Consistency in Considering Benefits and Costs in the Clean Air Act Rulemaking Process.” As the title suggests, the rule focuses on addressing benefit-cost analysis by the agency in the context of the Clean Air Act.


The second rule is entitled “Strengthening Transparency in Pivotal Science Underlying Significant Regulatory Actions and Influential Scientific Information.” This rule is intended to help the public and outside experts properly evaluate the science used in the EPA’s regulatory decision making as well as when the agency disseminates influential scientific information.


The goal of improving transparency is far from controversial and has long garnered bipartisan support. For example, President Barack Obama stated in a 2009 memorandum about scientific integrity across the government:  “The public must be able to trust science and the scientific process informing public policy decisions.”


The EPA, through its science transparency rule, is trying to create this trust. Despite the modest and commonsense goals of these rules, there has been opposition to them. Recent media reports about the final rules have provided misleading information, and that’s me being charitable.


What do these rules really do? Why are they important? And what are the myths, and what are the facts? Today we’re going to discuss these issues and more. Here’s the format for the program. We’ll hear from our experts, who I’ll introduce in a second. Then we’ll have plenty of time — we’ll have a brief discussion among the three of us, and then we’ll have plenty of time for your questions.


We’re very fortunate today to have two leading experts. You can see their full bios on The Federalist Society website. Rachel Jones is our first speaker, and she’ll discuss the benefit-cost rule. Rachel is Vice President of Energy and Resources Policy at the National Association of Manufacturers. Before joining the National Association of Manufacturers, Rachel was the Environment and Energy Counsel for the U.S. House of Representatives’ Committee on Science, Space, and Technology.


Clint Woods will speak second and will discuss the science transparency rule. He is the Policy Fellow for Regulations at Americans for Prosperity. From 2017 to 2019, he served as the Deputy Assistant Administrator for Air and Radiation at the EPA and previously worked as Executive Director for the Association of Air Pollution Control Agencies and in positions with the U.S. House Committee on Science, Space, and Technology, American Legislative Exchange Council, and the Recreation Vehicle Industry Association.


At this point, I’m going to turn the program over to Rachel Jones.


Rachel Jones:  Thanks so much, Daren. Appreciate the opportunity for us to take a moment to think through what really is in these rules. I know the last month or two has been quite a whirlwind of activity all over, and some of these things we haven’t gotten to unpack together. I’m looking forward especially to the Q&A time.


I won’t spend a ton of time detailing every single requirement in the — I actually like to call it the accounting rule. I think the agency called it that in some of their different press releases related to this. I really think it’s worth taking a moment to take a 30,000-foot view of things and say what’s the goal here? What is this actually doing?


Really, I’d say this is about fairness. I’ve shared this analogy before. I kind of view this as similar to discovery in a lawsuit. If you really want to achieve justice in the actual courtroom, that pre-courtroom discovery phase where everyone gets a shared set of facts and understands what the decision can and will be based on, that’s really important. And that’s what this rule is doing.


I think a lot of people, if they haven’t had a chance to read it, assume that it’s just about how you weigh costs versus benefits or some sort of a metric or litmus test on that. That’s not really the core focus of this rule. The focus of the rule is really how do you get to a benefit number? How do you get to a cost number?


For a long time, that process has not been laid out ahead of time, so we end up with all of these fights over what the number is, what it should be, how did you get there, what did you use. I think the goal of this rule is to say, “Hey, here’s the metric. Here’s how we’re going to go about getting to a benefit number, getting a cost number. Here’s how we’re going to communicate it to the public,” and then, “Here’s how we’re going to explain to the public how we used these different metrics to ultimately arrive at a regulatory decision.”


There are very specific pieces of it related to requiring that benefit-cost analysis. It has to be done in all significant things. Making sure that there is consistency and clarity in how those different metrics are communicated to the public. Seeing that change between different administrations, and I think this will really help provide some long-term stability there.


Also, a lot of what is here is what I’d call the risk-related requirement, and that really is that accounting-type requirements here where it’s unpacking exactly what the agency is going to do to arrive at those different benefit and costs numbers.


There’s a lot of details in the rule, and I think a lot of people haven’t taken the time to read or look at it. But, ultimately, I think it’s about fairness. From the perspective of manufacturers, we want to do the right thing. I talk to members all the time, whether it’s under the Clean Air Act or something else. They want to know what the rules are and how to follow them. But the frustration is often that it wasn’t clearly laid out how the agency would arrive at its decision, so things can be a little bit of a surprise and then we end up having litigation on the backend.


The Clean Air Act I don’t think was ever intended to create rules that are then endlessly litigated. If we can work on a shared set of facts on the front end and really get that engagement, then, ultimately, we’ll end up — our goal is less litigation. If that’s what we can achieve, then we’ll end up with cleaner air faster. Protecting people and the planet is really the goal, and I think we can achieve that with more engagement on the front end, a better understanding of how the agency will arrive at its decisions.


That ultimately creates stability that really lets manufacturers in America be able to compete globally. I really am optimistic about this rule and think that it could really make a significant and beneficial difference for people, the planet, and manufacturers.


That’s my nutshell overview of things, but like I said before, really looking to some back and forth and questions that folks might have and other perspectives people might share.


Thanks, Daren.


Daren Bakst:  Yeah. Thank you, Rachel. Appreciate it. Clint, I’m going to turn it over to you to discuss the science transparency rule.


Clint Woods:  Great. Well, thanks so much, Daren, for having me. It’s a real pleasure to be here and to join The Federalist Society and Rachel in talking about two, I think, really important actions by the U.S. Environmental Protection Agency, and excited to talk about their Strengthening Transparency in Pivotal Science Underlying Significant Regulatory Actions and Influential Scientific Information rule, which is a mouthful.


I thought it might be helpful to talk a little bit about the backdrop around this rule, and I think there’s some key commonality between these two actions by the agency in a move towards greater transparency in the way that the agency calculates costs and benefits and ultimately develops science-based rulemaking. Some differences, but then also talk through a few of the key provisions and terms within the bill because I think there’s some concepts that may be new to some of the folks listening and that may create some interesting challenges and a little bit about where we may be going from here.


The long story short is I think that this rule culminates after a proposed rule in early 2018 and then a supplemental notice of proposed rulemaking that asked some separate questions in early 2020 but really is inspired by a pretty simple concept and a pretty nonpartisan concept which is that our government decisions, and in particular regulations that may cost Americans billions of dollars a year in various costs, ought to be based upon transparent science. And that includes studies that are strong and peer reviewed and ultimately data that can be independently validated.


I think there’s an important corollary that’s represented in some of the provisions as well that taxpayer-funded science also ought to be open to the American people, and I think that’s really — I think if you removed some of the more controversial elements and didn’t mention the Trump administration or EPA, you’d probably find strong majorities of all parties that would support that concept.


Obviously, there’s been lots of discussion on Capitol Hill over the last decade over some of these issues, and really, I think, the agency has been striving towards this ideal for decades. In the early 1980s, Administrator Ruckelshaus issued a fishbowl memo which described how the agency wanted to operate as though it was in a fishbowl. They realized that they were at the center of a number of controversial rules and important questions about the state of the science and regulatory costs and that their engagement with stakeholders, their engagement with science needed to be open to the world.


Since that time, we’ve seen really across administrations commitments towards that end. Frankly, I think this rule is an attempt to operationalized and codify some of those commitments in a really important way.


I think the other dynamic that may be worth mentioning here is this happens against the backdrop of what I think are some legitimate questions about our peer review system. Peer review is incredibly important. I think, in many ways, the strengths of this final rule are emphasizing why independent peer review for important government science-based decisions is critical.


But as we’ve seen with what some people refer to as the replication or replicability crisis across a number of environmental and other sciences, there’s a widespread issue where a number of studies are unable to be replicated when given access. I think you’ve seen a strong push for data sharing and open access, and in many ways, this rule is designed for those scientists that are interested in having policy-relevant research that’s used by government for regulatory decisions that create a norm and incentivize more data sharing for their colleagues to help ensure that their results are sound and ought to be the basis for notice-and-comment rulemaking.


Finally, I’ll just note—and, Daren, you touched on this—I think this is very much grounded in decades of agency science-based decisions going back to the 1980s and a number of policies that have been adopted. That includes guidelines adopted in the Obama administration related to scientific integrity as well as implementation of the Information Quality Act that has resulted in the agency adopting handbooks on risk characterization and peer review.


All of these documents include, frankly, very similar statements to what’s contained in the final rule about the need for independent validation, the need for replicable or reproducible science, the need to shift away from certain kinds of models or closed data sets when promulgating important regulations.


I think, really, this rule is about our regulatory system deserving better. Peer review is important, but it’s probably not sufficient, and in many ways, the use over the years of non-transparent science—studies that are funded by taxpayers but are behind pay walls, the use of proprietary and black box models for key regulatory inputs—has been a trend across administrations for decades.


As I think a lot of your listeners probably know, EPA regulations, and in particular EPA air quality regulations, loom large among the costs and the benefits for all federal regulations as well as in the field of administrative law.


Just this morning, the White House Office of Information and Regulatory Affairs released their annual report to Congress on the cost and benefits of all federal regulations over the last few years, and that document has been around for about 20 years. Just about each year, EPA air quality regulations represent more costs and more benefits than all other federal regulations combined, which is a pretty astonishing thought.


I think there’s some questions about why EPA is pursuing this and in this way, but I think it does represent really the tip of the iceberg for reforms for the administrative state that are very, very important.


I just want super quickly about some of the things in the rule. I’ll just maybe start with some of the things that are not in the rule because I think this one has received substantial attention and controversy. Colleague Robert Han published an excellent piece after the first proposal back in 2018 in the Washington Post, and just to paraphrase the [inaudible 00:16:00] there, he said, “Administrator Scott Pruitt at EPA has proposed a very controversial rule that has received a substantial amount of feedback from politician and scientific societies and NVOs, and it would be great if any of them had read it.”


I think a similar conclusion exists in response to this final rule and some of the headlines that have been mischaracterized about what are in the rule. Just a few things. This rule does not require that any studies or science be categorically excluded. It is not a censoring science rule. It is an attempt, in fact, just to give greater weight to studies that are open and independently validated. It doesn’t require the release of any personally identifiable information or confidential business information.


It would not preclude any particular studies or case studies. People have suggested — I’ve seen in a few press reports that the rule would somehow impact things like clinical trials for vaccines or study of a particular oil spill. That is absolutely not the case. All that it asks is that the agency take a close look and, frankly, be less opaque about how it selects the studies and science that undergirds its decisions and give greater weight to those studies that an independent scientist could validate, which does not mean recreate the study.


The rule includes, I think, a number of important provisions, and I’ll just talk real briefly about some of those. It establishes how EPA considers the availability of dose response data that underlies pivotal science used in significant regulatory actions and influential scientific information. Not to belabor the point too much, but it then defines each of those terms.


It talks about dose response data, which is narrowly defined as the quantitative relationship between the dose or exposure of a pollutant, contaminant, or substance and its effects.


Significant regulatory actions is defined the same as in Executive Order 12866, which includes a wide variety of requirements but can include the overall cost or benefit of the rule exceeding $100 million, be novel and influential, etc., and subject to interagency review. And then it also impacts influential scientific information. That’s science that the agency reasonably determines has a clear and substantial impact on important public policies or private sector decisions. The rule only applies to future regulatory actions and scientific information.


Under the rule, EPA is to give greater consideration to studies where the underlying data are available in a manner sufficient for independent validation. But then it also indicates a number of criteria by which the EPA administrator may think about utilizing studies that maybe don’t have access, and that includes studies that have data that are available to anyone but also tiered or restricted access that may only be limited to certain researchers to ensure that there’s protections for privacy and confidentiality and other unique situations with certain data sets.


It also provides a number of exemptions. I think, in many ways, a future administration could very easily navigate these and continue to carry out their science-based decisions across their environmental statutes. Those exemptions include if there’s a conflict between this rule and the EPA environmental statutes that they administer, then those environmental statutes win out.


It also doesn’t apply to any adjudications or permit proceedings or enforcement actions but only really national rulemakings. The administrator can also grant case-by-case exemptions to the requirements to the rule, which I think is really an important element.


In many ways, I think a lot of the mischaracterizations and hypotheticals that have characterized the final rule’s coverage are mistaken. I also think there’s some important relationship between this rule and a number of those existing environmental statutes. Whether it’s the Clean Air Act or Clean Water Act or Safe Drinking Water Act, a number of our environmental statutes include important provisions about the use of science, transparency, and data.


For example, Section 307(d) of the Clean Air Act that establishes standards of review for national Clean Air Act rulemaking requires that the agency release the factual data, methodology, and major policy considerations that accompany a rule upon proposal. I think, in many ways, this rule helps to carry that out.


Differently than the accounting rule, as Rachel described, is a rule that exists across different EPA programs and across different environmental statutes that applies, whether it’s the EPA Office of Air or Water or the Superfund Office, among others. It also, rather than identifying particular statutory authority in those environmental statutes, is based upon the general federal housekeeping statutes.


As a result of that, there’s a quick challenge in the Eastern District Court of Montana to the rule that seeks for expedited relief. Happy to talk more about the fate of the rule, what it may mean in a future administration, and how it may be interpreted by EPA administrators in the future, but we’ll just conclude this portion by saying I think there’s a really important element here, and I’d encourage folks to take a closer look at what’s in the final rule and how it may ultimately get to that goal of open government decision making and sound scientific review so that the American people can ensure that our regulations serve them best.


Daren Bakst:  Thank you, Clint. That’s great. Let me ask some initial questions. We’ll have a little bit of a fireside chat, and then we’ll open it up for audience Q&A in a second.


I guess the first question I’d like to ask you, Rachel. There have been reports that the benefit-cost rule would limit what kind of benefits can be considered in Clean Air Act rulemaking. In particular, there seems to be a concern regarding the use of co-benefits. First of all, can you explain what co-benefits even refer to? And is this alleged limitation true? Finally, if my understanding is correct about the rule, why would the EPA want to separate out direct benefits from co-benefits?


Rachel Jones:  Sure. This is an area where there’s been a lot of, I think, misinformation floating around. I wish folks would take the time to read a rule before they start to opine on it. This rule does not prohibit the use of co-benefits, and in fact, in some ways, I think does a lot of service to this area. There have been a lot of folks who have been very frustrated over co-benefits being folded in in these rules, and that’s been an area of controversy.


What EPA has done here in this rule to, I hope, really alleviate this controversy is to require separate reporting of your statutory objective benefits. For example, if you have a NAAQS rule that is supposed to target ozone, then you would have — that’s the statutory objective. If this is an ozone NAAQS standard that you’re setting. Then, co-benefits would be that sometimes what you see is when you regulate for a certain pollutant, you actually end up seeing reductions in other pollutants.


That’s a good thing. We certainly wouldn’t want to discourage additional cleanup of the air. But those are co-benefits, meaning those are bonuses, if you will, to what the actual statutory objective is. What has led to confusion in the past is sometimes those have been folded in, and sometimes those co-benefits may be able to be targeted more effectively under the actual statutory provisions that were created for those.


Again, sometimes that’s true; sometimes it’s not. But what they’ve done here is simply require that EPA reports those separately so that when the public is looking, they can really understand better this particular statutory objective. Here are the benefits or costs here, and then, also, here are additional benefits or costs. I think it’ll really give everyone, again, a more level playing field as far as really understanding what are the different pieces.


A somewhat analogous type thing is if you think about a nutrition label where it tells you the different types of element — this much of the total calories is from fat. This is from carbohydrates. This is from protein. Again, it’s not in any way trying to prevent taking those into account, but it gives everyone the ability to see the different elements that would make up what the projected—again, all of this is modeled—but the projected benefits and costs of a rule would be.


Daren Bakst:  Great, Rachel. To follow up, just to clarify. The final rule doesn’t in any way require that the agency — it doesn’t dictate how much weight to give co-benefits versus direct benefits or how to even necessarily conduct a benefit-cost analysis. It’s basically just listing information. Is that correct?


Rachel Jones:  Well, no. I would say yes and no. It does actually give a lot of parameters about how they go about getting to their cost and benefit numbers. So how you do that analysis. That’s certainly — I think those details are laid out in a very helpful way that hasn’t always been laid out before.


But you’re correct. It doesn’t require the agency to weigh them in a certain way, but rather it does require the agency to explain how they did choose to consider these different things. That’s another, I think, really important and helpful element is that the agency has to articulate that. I think that that will be helpful in the future so that — you look at what the Supreme Court said in Michigan, and I think we’ll end up with better rules now that there’s a requirement that EPA spells out exactly how they used and how they weighed the statutory objective and then co-benefits that may be present.


Daren Bakst:  Thanks. Clint, regarding the science transparency rule, you mentioned something called tiered access to underlying dose response data. Can you just explain a little bit more of what that’s referring to?


Clint Woods:  Yes. I think one of the important caveats within the final rule is to establish that EPA greater consideration for dose response data that is available for independent validation includes open access. Frankly, there’s a really important and valuable movement towards this ends. A lot of journals have rightfully shifted towards a requirement for publication that you make available the underlying data or data sufficient for an independent researcher to understand, extend, and test your conclusions is a requirement for most major peer-reviewed journals at this point.


There are, I think, certain kinds of data, and EPA has a lot of discussion and received a lot of comments on different environmental science disciplines where there may be some important considerations and where you may want to have managed access that is limited to folks who come from that academic background and can understand and meaningfully use the data.


I will say, as a general matter—and this has been true for decades and has gotten even more true in recent years, and this is something that has been confirmed by the national academies and really across scientific disciplines—there are very easy tools that could be used to de-identify and mask data that allows for analysis without any personal or privacy or any other issues that may exist around national security or whatever else.


The vast majority of EPA decisions are based upon science in which there are a number of studies and competing studies. Really, in many ways, I think the rule is about how openly the agency describes their science policy decisions. How do you weigh this study versus that study? What is the weight of the evidence?


Rachel mentioned National Ambient Air Quality Standards and a regular occurrence for review of those standards for traditional pollutants like ozone or particulate matter or lead. They generally cite thousands of studies and go through a process where you start with the state of the science and ultimately lead to proposed and final rules to retain or revise a national standard that could result in billions of dollars of cost and billions of dollars of health benefit and are really, really important.


In that case, in fact, the Supreme Court and EPA has determined that consideration of cost and implementation aren’t a factor. So, science is really, really important. But, then, how do you decide when there’s 100 studies that speak to the effects of ground-level ozone on asthma for a particular population? For the first time in a rule, the agency has laid out how they think the administrator ought to approach it. And not an ironclad rule that says, “Thou shalt only use this kind of study,” but instead a series of considerations.


I think it’s really important that it’s in a rulemaking process because I often think of the guidelines that exist in EPA’s peer-review handbooks and guidance documents and other scientific policy framing devices that the agency has used in the past, in many ways, are only as good as the paper they’re written on and the people who are reading them. In many ways, those documents don’t have a binding effect that restricts the agency in any way serves as the connective tissue of the administrative state across administrations.


I think for the first time, the agency is saying, “This is how we think this should be interpreted. This is why we think greater weight should be given to these kinds of studies, and there’s also some important exemptions.”


I think, in many ways, the final rule really sets that up in a way that’s very helpful but probably also in a way in which a future EPA administrator that wanted to come to a certain outcome could. I think there’s a legitimate concern about the ways that the thumb on the scale, those science policy decisions, has taken place in the past.


This goes back to the 1980s. We had a very active debate about risk management and how we could separate risk management and regulation from risk assessment, and I think folks legitimately have said, “Hey, I’m concerned that the way you pick studies ultimately lead to the conclusion that you want, whether that results in a more or less burdensome regulatory approach.”


I think, in many ways, this opens up that process, describes how EPA intends to achieve it, and then really sets a fairly high bar for the agency to describe why they did that in the future.


I will just say to Rachel’s point, my reading of both of these rules is not that it would have necessarily undermined or — I think you could’ve come to a similar substantive conclusion for virtually any major EPA regulation in the last several administrations under both of these rules. The main difference from the combination of these two rules is you know a whole lot more about how they got to the calculation of cost and benefits and the consideration of science than you would have previously. So I think that’s really the great contribution that these two make to the administrative legal process.


Daren Bakst:  Thanks, Clint. Micah, we’re ready to start fielding questions, so if you can give the directions and get the questions in queue, and as you’re doing that, I’ll ask another question.


Micah Wallen: Absolutely. Let’s go ahead and open up that floor for audience questions. While we’re waiting for those questions to come in, Daren, I’ll toss it back over to you.


Daren Bakst:  Thanks. Let me ask a question to both of you, Rachel and Clint. There are some who hoped that the rules would actually do a lot more to promote a sound benefit-cost analysis and sound science. These rules seem to be a small step forward. What would you say to those who think the rules don’t go far enough? Rachel, I’ll start with you.


Rachel Jones:  I think that we need to live in the world of the possible and to — it might sound trite, but don’t let the perfect be the enemy of the good. Folks who say this is a small step and it needs to be a lot more — I would argue that if you, for example, especially on the benefit-cost rule, some people had asked for a requirement that benefits must exceed the cost. If you want that, then you need to get Congress to change the Clean Air Act.


I think EPA did a really good job of being respectful of exactly what the Act says and the intent there and then creating a rule that will strengthen their ability to fulfill and execute on what Congress told the EPA to do under the Clean Air Act.


The other observation I would just make is it’s interesting that there’s this dichotomy where we have some folks saying this needs to go a whole lot further; it’s too much of a baby step. And at the same time, you have people saying the sky is falling. I think usually when you end up with those differing views on the exact same thing, sometimes that’s an indication of you landed somewhere in the middle; a fair balance.


That’s the observations that I would make about that question of is this enough? Is this too much? I’d say it’s kind of in the Goldilocks zone. It’s just right.


Daren Bakst:  Clint, what do you think?


Clint Woods:  Yeah, so that’s a really good question, and I agree with Rachel in that I think — and this is often the case, especially when we’re talking about binding regulation, which is a really unique thing. In many ways, the Trump administration has been unique in a wide variety of ways when it approaches regulatory reform, but the idea of establishing not one but two rules that restrict the agency’s operation in terms of how it develops regulation is really a pretty unique dynamic.


But the fact that we’re talking about binding regulation to apply to a regulator for rules that are now being developed decades after the Clean Air Act and Clean Water Act were last significantly revisited by Congress is a pretty astonishing one, I think. From the perspective of Americans for Prosperity, we think there needs to be dramatically more legislative accountability, revisiting of our outdated statutes, to meaningfully rescind and red tape and restrict the administrative state in a way much more consistent with how we view the three branches ought to operate.


I will say I think folks who raise those concerns about these rules not going far enough, I agree with them. I think, in many ways, this is not a silver bullet. I think there’s a number of ways even absent reversal of this rule either through the use of the Congressional Review Act or the potential for notice-and-comment rulemaking to rescind this action or a change in litigation posture and a potential stay from a district court. I think there’s a number of ways in which a future administration, even one that has much more ambitious regulatory goals than the Trump administration has, to work within this and, frankly, to pursue those same goals in a way that is more transparent.


I think there’s some pretty big loopholes. So, whether it’s providing case-by-case exemptions, the definition in the science rule of dose response data and significant regulatory actions, that really limits you to, frankly, just a few data sets for a just a few rules each year, and they tend to be the big ticket ones.


And, then, there’s a wide variety of ways in which I think an administrator could articulate why they decided to not give greater consideration to a study that is more open, more public, and available for independent validation. I think, in most cases, that would probably not be persuasive to me, but I think it may help change the dynamics in terms of the federal judiciary’s deference on some of these key technical issues. By articulating those in a rule, I think the agency has a higher burden to overcome in the future in explaining why it deviates from that approach.


I think, in many ways, it is the best that we could hope for based upon where we are in terms of disconnection of the administration state from actual elected officials and, in many ways, that’s a call for us to get away from statutory obsolescence and to think about how our environmental statutes need to be reinvigorated with twenty-first century ideas.


Daren Bakst:  Thanks. Micah, do we have any questions in the queue at this point?


Micah Wallen:  Yes. We have one caller in the queue. We’ll move to that person.


Caller 1:  Hi. My question is for Rachel. One criticism of the rule that I’ve heard is that while it doesn’t explicitly dictate the value of benefits versus co-benefits, the fact is that co-benefits are devalued from pervious calculations that were done before this rule because when a policy or regulation is reviewed, supposedly, under case law or guidance, it’s dictated that only the statutory benefits are truly considered.


Therefore, the benefits side of the cost-benefit ratio goes down following this rule. Admittedly, I haven’t read the rule, so I don’t know whether this criticism is a symptom of folks just not reading the rule or not fully understanding the context or framework, but I’m curious if you have any thoughts on that criticism.


Rachel Jones:  Yeah, I mean, it’s an interesting one. I do think it is largely that folks have not read the rule. I know we’re all busy, and it’s really hard, and we read snippets. We all sometimes don’t have the full set of facts before we have our opinions. I think that leads to a lot of confusion and angst that maybe didn’t need to be there.


I don’t agree with the idea that this rule is written or somehow reduces the benefit side of the ratio, if you will. I agree with Clint’s point earlier that I don’t think that this would have necessarily changed rules over many administrations in the past as far as maybe what the outcome was, but this really gives people a much better opportunity to see all the details of why and how you get to where you land.


The only, I would say, change that maybe I could see this doing is they take a few steps to make sure that there’s not double counting of benefits or costs. It’s on both sides. So that could be. There have been a few instances in the past where folks feel like when you have multiple rules that are in the proposal stage at the same time or you see — making sure your baselines line up. So, there could be some differences when you follow the full protocol, if you will.


But the other, I think, really important thing for folks to think about is that any of these changes, they apply to both sides of the benefit and cost paradigm. If there’s changes that would change the benefits, then the same thing would happen on the cost side.


The other thing just to remember is that this does nothing to, obviously, change the Clean Air Act itself. Requirements in the Clean Air Act are different from section to section as to when you take a look at benefits and costs. Sometimes it’s really early, sometimes it’s really late, and sometimes it’s after you’ve arrived at the requirements that you’re going to arrive at. It’s very science-only driven.


I think it’s a really interesting approach they’ve taken, and I think is one that does a good job of fitting well with very different regulatory approaches that you find in different sections of the Clean Air Act.


Daren Bakst:  Micah, do we have any other questions? Oh, sorry, Rachel.


Micah Wallen:  No other questions lined up in the queue as of now, so Daren, I’ll toss it back over to you.


Daren Bakst:  Yeah. Thanks. Clint had mentioned the Congressional Review Act, so I just wanted to ask a question about that to both of you. There’s a lot of interest in whether these rules could be subject to the Congressional Review Act. Can either one of you briefly explain what the Congressional Review Act does, and do you think these rules could be subject to the Congressional Review Act? Clint, why don’t you take a shot at it.


Clint Woods:  Absolutely. The Congressional Review Act of 1996 provides for an expedited process for both chambers of Congress to adopt a joint resolution of disapproval for a regulation and only requires a simple majority and the signature of the president.


This has been used pretty sparingly in the past, at least prior to 2017. It was only used to reverse the ergonomics rule at the end of the Clinton administration, and then, in 2017, got a lot more use early in the Trump administration for a wide variety of reasons, including Republican majorities in both chambers and a president willing to use it.


In many ways, it requires—and I think the Senate is probably, as usual, the long pole in the tent in terms of process—but requires ten hours of Senate debate on a particular resolution of disapproval for a rule.


I’ve seen some misconceptions even in just in the last few days about what rules it applies to. It has some special procedures for major rules which includes—it kind of has the same definition as significant rules under Executive Order 12866—rules that have costs or benefits above $100 million, among other things.


It actually applies to any rule, broadly defined. And both the Government Accountability Office and the Office of Management and Budget has broadly read that to include guidance documents. The definition of rule in the CRA matches up with the Administrative Procedures Act definition but then provides for additional exceptions.


I think, for these two rules, the EPA interpretation, partly to justify having an immediate effective date but then also have argued that neither are subject to the Congressional Review Act because they satisfy one of those three exceptions to the definition of rule by virtue of being internal to the agency, procedural, etc.


I think EPA’s opening bid is they don’t need to submit these actions to Congress to potentially be reversed through the use of the Congressional Review Act because of the nature of the rulemaking. I think there are some open questions about whether or not Congress agrees with that view or may want to take these up. I think, perhaps, of the two, the science transparency rule strikes me as probably within a half dozen or maybe ten actions that I would expect the new Senate majority to probably prioritize early in a Biden administration as actions that they may want to reverse.


Just one more note about the Congressional Review Act. Well, maybe two more notes. Among other things, why Congress may want to do this rather than having a future administration go through notice-and-comment rulemaking, for one, it prohibits rules that are substantially the same for being promulgated in the future by that same agency. And two, it is precluded from judicial review.


So, there may be some reasons or some reasons why you wouldn’t want to use the Congressional Review Act on a particular action. I think we’ll see some of those decisions being made probably in real time as the House and Senate consider lots of things, including a number of nominations in a new administration, a target-rich environment in terms of some pretty substantial rules since August 2020, which is the timeline that that lookback period covers, as well as impeachment proceedings and other things that are going to take up time on the Senate floor.


There’s my much-too-longwinded answer about how I view it, but I’m very interesting to hear from Rachel as well.


Daren Bakst:  Rachel, do you have anything to add to that?


Rachel Jones:  No. I fully agree with Clint. I think the bottom line is sometimes we all live in our own little worlds and we think that everyone is focused on the same things we’re focused on. I think it’s worth remembering at the beginning of the Trump administration where you had Republicans, who generally tend to love the CRA and want to use it a lot more than historically have Democrats have wanted to use it.


Even in that time period, I think we only had—and you’ll have to check my number on this—but I think maybe only 14 CRAs actually started moving on the floor from a Senate perspective, and I think maybe even that 14th one didn’t ultimately get the final vote on it.


If you think about across all the different agencies, if you’re looking at financial regulations, immigration-related actions, there’s a lot of different things that the outgoing administration did that I think could potentially be areas of focus. So, I think it’s important to remember there is a limited clock, as Clint laid out really well, with all the other competing things.


I think possibly, but I also agree with Clint. I think that probably the transparency rule has certainly gotten more attention from a controversy standpoint. If everyone’s choosing across the whole government, if there was one in this space, that could be. But we’ll just have to see.


There’s, like Clint said, a lot of competing things, and the Senate’s calendar is such that it’s always a knife fight to try to get whatever your issue of the day is to be considered.


Daren Bakst:  Thanks. Micah, do we have any new questions in the queue?


Micah Wallen:  No questions in the queue. I think that’s all the questions for today.


Daren Bakst:  Okay. I still have a couple more, if that’s okay, that we want to get through. But I do encourage people to ask questions. Rachel, I want to get to this question because I think it’s pretty important.


Critics of the benefit-cost rule argue that the — they say that the rule is unnecessary because agencies already have to do a benefit-cost analysis under executive orders. How would you respond to that criticism?


Rachel Jones:  You know, I would — two ways. Just because you have executive orders or the like that have you do what I would consider more of a backend analysis — an RIA is kind of an after-the-fact taking a look at things. Those are important requirements, and this rule locks in the requirement in a rulemaking, which obviously is more durable.


But what I would say is that the goal of this rule is really less about a backend analysis and much more about — as I kind of mentioned earlier at the beginning, this is the discovery phase in a lawsuit, if you will.


This is really laying out the process that EPA will go through in benefit-cost analysis. It’s less about just that you do it. Just because you do it doesn’t really matter if you can’t ensure the quality of a benefit number you land at and a cost number you land at.


Just saying we’re going to weigh the benefits and costs, in some ways, is kind of meaningless if you don’t know how you get to those numbers. And not just know how, but have a predictable decided-ahead-of-time type of a structure. That framework for arriving at benefit numbers and cost numbers is incredibly important so that you can have assurance that the quality of what those numbers look like is really something that you can rely on.


Daren Bakst:  Thanks. One of the key issues for both these rules is the ability for the public and others to enforce the requirements of these rules. Can you, Clint and Rachel, can you discuss the enforceability issues connected to these rules and whether or not they will be enforceable in the court?


Clint Woods:  Yeah, Daren, I think that’s a really good question, and I think we’ve seen an interesting history here with actions like the Information Quality Act that established some criteria for agencies to adopt in terms of peer review and information quality for any disseminated information that has not had the impact that I think those of us who’d like to see more open science would like to have seen.


In many ways, I think Rachel’s in a better position to talk about some of the key provisions of the cost-benefit and accounting rule. The science transparency rule is fairly silent here. It identifies a separate authority under the Federal Housekeeping Statute. I think you would see arguments in applying this rule related to particular rulemakings that may also cite, as I mentioned before, some of the provisions of our environmental statutes that also encourage transparent science decision making.


In many ways, I think there’s some open questions. I think that there may be some lessons to be learned, but I think it does provide a potential tool in the toolbox and maybe a little bit more clarity when it comes to the accounting rule than the science transparency rule about enforceability, but I’ll defer to Rachel on that front.


Rachel Jones:  Yeah, I agree with Clint and especially in the importance of this question. I actually think we’re going to have to wait and see. I think, ultimately, whether you can enforce this against the agency, I think that question will probably ultimately be litigated at some time in the future if the agency doesn’t follow its own rules.


What is pretty clear, and I would encourage folks to read that section of the rule itself. There’s a really good legal discussion in the preamble of this exact question. I think probably the EPA really thought a lot about it. You can tell in reading it. And there certainly were a lot of comments that were filed discussing this exact question. You can see the thought really clarifying and crystalizing between the proposal and then the final rule.


The agency certainly takes the position that this does bind the agency and it is enforceable against the agency in the future if they failed to follow the framework here. I think that there’s a lot of pretty good case law on that. I think the other relevant question on this will be what’s the remedy. Does it remand it to the agency? And what happens during that remand? That, I think, is not addressed, as far as I recall, in the rule itself, and I think will be an important question in the future.


My hope is that we don’t ever have to worry about that. My real hope is that the agency will follow its own rules that the agency — and Clint raised this earlier. Both of these rules, I think, really track with promises and commitments that the agency has made for decades. Again, my hope would be that they would follow both of these rules in a way that ultimately gets us better air rules faster to protect people and the planet, kind of as I said before.


It is an interesting question. My hope is that we won’t even have to worry about that.


Daren Bakst:  Rachel and Clint, thank you so much for this great discussion. I want to thank everybody for calling in today. Over to you, Micah.


Micah Wallen:  Absolutely. Thank you, Daren. On behalf of The Federalist Society, I’d like to thank all of our experts for the benefit of their valuable time and expertise today. We welcome listener feedback by email at [email protected].


Thanks to all for joining us. We are adjourned.

Rachel Jones

Vice President, Energy & Resources Policy

The National Association of Manufacturers

Clint Woods

Policy Fellow for Regulations

Americans for Prosperity

Daren Bakst

Director of the Center for Energy and Environment and Senior Fellow

Competitive Enterprise Institute

Energy & Environment

Federalist Society’s Environmental Law & Property Rights Practice Group

The Federalist Society and Regulatory Transparency Project take no position on particular legal or public policy matters. All expressions of opinion are those of the speaker(s). To join the debate, please email us at [email protected].

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