When the Electric Power Research Institute (ERPI)—the research arm of the U.S. power industry—met with OIRA last month to discuss the various “beneficial uses” of spent coal ash from power plants, their timing was impeccable. Or so it would seem. On the day of the meeting, October 16, EPA submitted for OIRA review its pre-rule proposals regarding the regulation of coal ash disposal under the Resource Conservation and Recovery Act (RCRA). In reality, the meeting demonstrates how eager regulated industries are to air their complaints to OIRA on rules they dislike, or in this case, expect to dislike. The industry’s lobbyists earned their paycheck this time around, getting in to see their traditional champions at OIRA to lay the groundwork for protesting a rule that has not yet even reached the notice-and-comment stage of rulemaking.
Coal ash comprises all the solid waste that is left over when coal is burned to generate power. It’s a large threat to the environment and public health, because it can contain varying levels of arsenic, mercury, radioactivity, lead and other toxic substances. To make matters worse, coal ash disposal is left largely unregulated, so most power plants dispose of it in shallow holes or by building weak earthen walls around piles of the stuff. Both methods result in toxic substances leaching into nearby surface and ground water systems. The collapse of such an earthen wall in Kingston, Tennessee last December resulted in the release of 5.4 million cubic yards of coal ash into the Emory River. The spill covered more than 300 acres, made three homes uninhabitable, and damaged 23 other homes, as well as roads, rail lines, and utilities. The Tennessee Valley Authority estimates that cleanup will cost between $933 million and $1.2 billion and take two to three years to complete.
Full textCass Sunstein had barely begun settling in to his new position as Administrator of OMB’s Office of Regulatory Affairs (OIRA) in September, when OIRA released a draft of OMB’s 2009 Report to Congress on the Benefits and Costs of Federal Regulations. Today marks the deadline for submitting comments to OMB on the draft, and I joined CPR President Rena Steinzor and Policy Analyst James Goodwin in submitting comments.
We read this year’s report with interest, curious to see how the new administration would approach this annual ritual. While OIRA has in the past been a nerve-center of anti-regulatory ideology and the annual report a ritualized hymn to the virtues of cost-benefit analysis, we hoped Obama’s OIRA would use the annual report as an opportunity to fundamentally re-envision its mission – to perhaps re-invent itself as a resource providing positive and constructive assistance to the embattled, de-funded and demoralized federal agencies charged with protecting our health and environment.
Overall, we were disappointed. While this year’s report sanitized some of the more blatantly ideological material that had become a staple of past reports, the basic form and content of the report remain unchanged. It continues to waste inordinate time and resources on the inane and ultimately fruitless task of attempting to aggregate in dollar terms the overall costs and the overall benefits of dozens of regulations issued by a diverse array of federal agencies – rules that protect all sorts of intangible, non-market values: protecting the health of mothers and newborns, protecting endangered whale species, reducing respiratory and other health effects of ozone, reducing neurological damage to children. This year’s report concludes cheerily that the annual benefits of major rules issued by the federal government over the past ten were somewhere between $126 billion and $663 billion, while the annual costs of those regulations was just $51 billion to $60 billion. Phew! What a relief!
Full textLast month the National Research Council (NRC) released Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use. Properly understood, the NRC report is an admirable attempt to bring the consequences of energy use into sharp focus by putting those consequences into terms that are readily understandable by the general public. The NRC recognizes that the report is limited because it was unable to quantify and monetize all the impacts of energy production and use, thereby significantly understating their full costs. But the problem is worse: Even where the NRC did attempt to quantify and monetize the costs associated with energy, the methods that it used systematically understate the costs of those impacts.
According to the NRC report, the “cost” of energy production and use was at least $120 billion in 2005. The report reached this result by identifying and quantifying many of the impacts of energy production and use before converting those impacts into monetary terms. The NRC cautioned that “this aggregate total substantially underestimates the damages” because many impacts could not be quantified and/or monetized due to challenges like insufficient data. (See pages 4 and 16 of the report.)
To its credit, NRC acknowledges that its individual estimates of costs of impacts “can have large uncertainties” (for example, see page 4 of the report), but the report does not explain what contributes to these uncertainties, or that these uncertainties tend to result in underestimates of the costs of impacts.
To compile its report, the NRC was forced to monetize—or put a price on—impacts like premature deaths and ecological damage. But things like lives saved or environmental protection involve values that transcend simple dollar amounts -- they are priceless. Nevertheless, the NRC employed a number of controversial techniques in order to put a monetary value on these impacts. But, they also have significant practical problems as well: These techniques suffer from methodological shortcomings that inevitably underestimate the very values that they purport to measure.
Full textOne of the great political communications successes of the past 30 years has been the right wing’s relentless assault on the American regulatory system. Think of the words and images that have come to be associated with “regulation” in that time: red tape, bureaucrats, green eye shades, piles of paper stretching to the ceiling, and more. And the approach has worked – remarkably well, in fact, given the compelling imagery on the other side of the ledger: children left to play in unregulated polluted waterways, power plants belching smoke into the air we breathe, foods that poison and drugs that induce heart attacks. Imagine if the producers of campaign commercials decided to dig into that Pandora’s Box of images!
Most of the attention that the regulatory system draws focuses on individual skirmishes – a fight over how and to what extent to regulate mercury, for example. Many of those are important fights, to be sure. But if it were possible to draw the camera back and take a snapshot of the entire regulatory structure in the context of its statutory mandate to protect Americans from health and safety hazards, and to protect the environment from abuse, the dynamic would look very different.
Viewed from that distance, each of the recent incidents of large-scale regulatory breakdown – peanut butter, spinach, Vioxx, rollover-prone SUVs, excessive air pollution, inaction on the very real challenge of mercury pollution, and only now the beginnings of action on climate change – each of these examples contributes to a much larger and often untold story: The regulatory system isn’t really working all that well. It’s had prominent successes – removing lead from gasoline, for example, and forcing automobile safety measures on a reluctant industry, to name just two.
But if we believe Congress meant what it said in the various “protective” statutes that the regulatory agencies enforce, we must conclude that the agencies are earning mediocre grades at best.
Full textGreenwire and the Los Angeles Times ran pieces last week shining a light into a dark corner where staff at the Office of Information and Regulatory Affairs once again meddled in scientific regulatory programs where they do not belong, second-guessing EPA’s administration of the Endocrine Disruptor Screening Program (EDSP). The program, mandated by Congress under the Food Quality Protection Act, is designed to identify pesticides like DDT that cause profound changes in wildlife and, potentially, people, through the ubiquitous application of pesticides. Both articles highlighted the key problem, which is that the OMB-promoted changes to the EDSP would undercut EPA’s attempt to get a full suite of new test data on 67 chemicals’ potential endocrine-disrupting effects. But there's an additional important issue: OMB’s meddling, under the auspices of its power to enforce the Paperwork Reduction Act, shifted a heavy burden from industry’s shoulders to EPA’s.
Put another way, Obama’s OIRA snuck through the back door changes that industry had failed to get through the front door of the normal administrative process during the Bush Administration, ultimately forcing changes that threaten to completely undermine the EDSP, which has been moving at a snail’s pace in the face of ferocious industry opposition for well over a decade. Once again, like the episode we reported yesterday ("Don't OMB Economists Have Better Things to Do Than Channel Industry Opposition to EPA Science?"), this particular bit of mischief was a fait accompli before Cass Sunstein was confirmed as OIRA Administrator. And, once again, the episode shows how much work Sunstein will have to do to transform and redirect an institution that in far too many ways continues to behave as if George W. Bush and his anti-regulatory appointees were still running the government.
Aware that chemicals used as active and “inert” ingredients in pesticides have the potential to disrupt the delicate balance of estrogen, androgen, and thyroid hormones, Congress mandated that EPA develop a research program that would help government regulators better understand the effect of pesticides on such systems. After years of advisory committee meetings, stakeholder input, and internal study, EPA in late 2007 proposed a two-tiered strategy for implementing the EDSP. First, EPA would issue test orders to pesticide registrants requiring them to put certain chemicals through a series of assays, screening to see which chemicals have the potential to interact with estrogen, androgen, and thyroid hormones (“Tier 1 Screening”). EPA would then require that the chemicals that exhibited a potential to interact with the hormones be run through a series of more demanding tests to determine how they actually interact (“Tier 2 Testing”).
Full textBefore Cass Sunstein had spent much more than a week as the official director of the Office of Information and Regulatory Affairs (OIRA), he invited us over to the White House to talk about how he wanted to shape his small office of economists and statisticians into a strong force for progressive policy within the White House. Followers of the Center for Progressive Reform know that we put out a report in the run-up to his confirmation that was critical of his views on cost-benefit analysis. So I give him credit for opening the door to us, and so soon after his confirmation at that.
It was a good meeting, and we pledged to keep in touch as he undertakes what I hope will be a re-education that will convert his staff from the Bush mode – serving as a sort of waiting room for disgruntled industries – to what we hope will be the Obama mode – serving as a group of visionary economists that identifies the toughest problems holding back desperately needed protections for workers, the public, and the environment, and then moving to make sure the regulatory structure does something about them.
An obscure set of documents posted just last week on the EPA website illustrates the point, demonstrating that in the period before Sunstein’s confirmation OIRA staff were continuing business as usual, acting as if President George W. Bush were still president.
Full textHow’s this for any irony? David Michaels, President Obama’s nominee to head the Occupational Safety and Health Administration (OSHA), has written a book, published by Oxford University press, documenting how industry manufactures doubts that chemicals harm people by accusing regulators and plaintiff lawyers of relying of “junk science” instead of “sound science.” Now, after Michaels has exposed this effort as a public relations campaign that mischaracterizes how science actually works, he is being attacked on the grounds, you guessed it, of favoring junk science. And, because he favors “junk science,” he must be, you guessed it, a “radical.”
Michaels, an epidemiologist and research professor at the School of Public Health and Health Services at George Washington University, notes that the “sound science” campaign originated with the tobacco industry’s efforts to stave off regulation and tort suits by attacking the science indicating that smoking kills you. It has since been taken up by anyone with a financial interest in avoiding regulation or being sued for exposing people to toxic substances.
The sound science campaign depends on three ideas that appear reasonable enough on their face, but constitute sophisticated sabotage in their operation.
Full textIssues of national security have always enjoyed a free pass when it comes to the use of cost-benefit analysis (CBA) as the primary form of making decisions. For example, no military official or politician interested in keeping his job would ever dare publicly question whether the additional money spent on extra armor for tanks to keep soldiers safer could be put to better use somewhere else.
There are plenty of reasons why we are willing to accord national security decisions this special treatment. For one thing, as Ezra Klein noted recently, “we're uncomfortable subjecting military demands to traditional economic analysis.” Using CBA for military decisions necessarily puts us in a difficult ethical position: It seeks to prioritize the goal of “efficiency” over values that many Americans hold truly sacred, such as the duty of protecting the lives of our soldiers. These values often represent moral absolutes on which we aren't willing to compromise—particularly for the sake of efficiency. Thus, I don't think many people are willing to accept that there is an economically “optimal” amount of soldiers’ deaths. If a soldier’s life is priceless, every reasonable measure should be taken to protect these lives.
But there are practical reasons for opposing the use of CBA in national security decision-making, as well. Every year, the White House Office of Management and Budget (OMB) produces its annual Report to Congress on the Benefits and Costs of Regulations, which, among other things, seeks to provide an “estimate of the total benefits and costs of regulations reviewed by OMB,” both for the past fiscal year and for the past ten-year period. Every year, however, these reports exclude from consideration virtually all regulations adopted by the Department of Homeland Security. As the reports explain, this exclusion is necessary because “The benefits of homeland security regulation are a function of the likelihood and severity of a hypothetical future terrorist attack; on both issues, judgments are conjectural. For this reason, such benefits are very difficult to forecast, quantify, and monetize.”
Full textAfter weeks of sustained attack from the right-wing on issues that are marginal to the job the President asked him to do, Cass Sunstein has emerged from the nomination process bloody but apparently unbowed (here's this afternoon's roll call). He is now the nation’s “regulatory czar,” Director of the White House OMB Office of Information and Regulatory Affairs. Although Professor Sunstein has been sitting in the Old Executive Office Building for months, he has undoubtedly been preoccupied with his nomination battle. Having survived the occasionally nonsensical trial by partisan and self-serving flight of fancy that was his confirmations process, we hope he will notice that his staff at OIRA has been behaving as if the 2008 election never happened. Having paid careful attention to OIRA over these past few months, in search of evidence of a new outlook, I’m sorry to report that I’ve drawn the strong impression that Bush Administration culture and ideology remain unchanged at OIRA. To deliver change we can believe in, Cass Sunstein needs to convert OIRA from industry waiting room to objective arbiter of inter-agency disputes.
My impression that change has not yet arrived is based in great measure on a chart compiled and released today by the Center for Progressive Reform, showing that in recent months, OMB met nine times with outsiders to discuss health and safety regulations, and that eight of those meetings were dominated by industry representatives complaining about proposals under development at the Environmental Protection Agency (EPA), the Food and Drug Administration (FDA), and the National Highway Traffics Safety Administration (NHTSA). For example, tire manufacturers met to discuss NHTSA’s proposals on inflating tires to increase fuel efficiency. The oil industry met to discuss EPA’s rule on the reporting of greenhouse gas emissions. And the airline industry met to discuss EPA’s rule on water discharges from airport de-icing operations. Public interest groups have met with OIRA on only one regulatory matter: amendments to an EPA rule on renewable fuels. That meeting was one in a set of four, with the other three devoted to the views of the American Petroleum Institute, the biodiesel industry, and Shell Oil.
Late this afternoon the Senate ended debate, in a 63-35 cloture vote, on the nomination of Cass Sunstein for Administrator of the Office of Information and Reuglatory Affairs (OIRA). Here's a quick look back at what CPR scholars have said about the Sunstein nomination and the role of OIRA in regulatory policy:
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