President Obama made a bad decision to withdraw EPA rule.
President Obama’s opposition to tightening the national ambient air quality standards for ozone standard is a bad thing. The Environmental Protection Agency’s (EPA) Scientific Advisory Board recommended, both in the current and George W. Bush administrations, that the standard be set between 60 and 70 parts per billion to protect public health from premature deaths, heart attacks, and countless asthma attacks among those who spend a lot of time outside. The Bush Administration, though, established the standard at 75, saying there was too much scientific uncertainty to warrant a tighter standard. President Obama’s decision in effect endorses this view.
Worse, it’s not even clear that the Bush Administration standard will go into effect. Given the White House’s opposition to implementing any new standard until a revision in 2013, it seems unlikely that the White House will want even the Bush Administration standard put in effect, but instead will choose to keep the previous 84 parts per billion standard in effect. This hands-off decision is not good news for breathers.
Perhaps the most conspicuous aspect of the President’s decision was his frank reliance on cost considerations. The Clean Air Act has repeatedly been interpreted, most recently by the U.S Supreme Court, to bar EPA from relying on costs in setting these standards. This interpretation has come under attack from some academics, who argue that it is inevitable that costs play a role. After all, there is much doubt in our scientific knowledge about air pollutants, even one as studied as ozone. EPA must therefore make policy decisions about how to handle uncertainty from a range of scientifically plausible possibilities. Moreover, EPA must decide questions such as which group will be deemed the sensitive population to be protected, and which effects constitute health effects against which the standard must guard. Surely costs must be playing some kind of implicit role in these decisions; indeed, there has been congressional testimony that the EPA administrator indeed looks at cost data.
So why not let cost considerations be explicitly weighed? That would take out of the backroom a debate about costs that is bound to be occurring, and instead allow public discussion. But there are good reasons for not letting EPA use costs to justify its decisions. First, by directing EPA not to consider costs, Congress is in effect minimizing the weight that costs can be given in the decision-making process. This is appropriate if we agree that the primary aim is to produce standards that protect the public health.
Second, not allowing EPA to consider costs creates a bias in favor of protecting health. Suppose that EPA decides to be lenient in setting an air quality standard, and a person suffering effects from the pollutant complains. EPA cannot simply say, “Well, it costs too much to protect you.” Instead, EPA must speak the language of public health and explain why the effects are not being protected against. This explanation will often be difficult. By contrast, consider the worker who complains that a standard might throw him or her out of a job. (This does not happen very often, but it does sometimes occur.) EPA has an easier response: “We feel bad for you, but we can’t consider costs in setting the standards.” Therefore, the exclusion of costs creates an incentive for EPA to be strict in setting the standards.
Consider also the difficulties of doing a really comprehensive cost analysis. If there is one thing we know about environmental standards, it is that ex ante estimates of cost tend to be too high. This is not because of deception by industry; rather it is because setting and implementing a standard gives industry and equipment vendors an incentive to find cheaper ways of meeting it. For instance, the advent of the scrubbing requirement in the 1980s was accompanied by a burst of patent activity in the field.
Estimating benefits is much harder. We have come a long way in the use of willingness to pay as a way of quantifying benefits, but comparing health benefits with costs remains tricky. The ozone standard illustrates this problem well. Tightening the standard to 60 parts per billion, the stringent end of the range considered by EPA, would result in benefits from $35 billion to $100 billion, while the costs would be $52 billion to $90 billion. Clearly such wide estimates are not helpful in deciding whether the benefits would exceed the costs. Prohibiting EPA from openly considering costs in effect safeguards such cost-benefit analyses from detailed judicial probing. This protection seems appropriate given the limited accuracy of the analyses.
There is one final consideration. As Justice Scalia pointed out several years ago, considering cost would just provide another imponderable factor to be considered in the standard-setting process. If anything, consideration would increase, not limit, EPA’s discretion, which is already very broad. Letting EPA consider cost does not provide a decision rule for the agency, but rather increases subjectivity.
Thus, it is appropriate that EPA remain barred from publicly considering cost in its decisions to set ambient air quality standards. And thus this is also another reason to criticize President Obama’s opposition to EPA’s latest ozone standard. The President’s action not only leaves the public breathing dirty air. It also clouds the importance of what should be EPA’s primary consideration: protecting people and the environment from harm.