Economic Analyses at EPA: Assessing Regulatory Impact (Resources for the future)

"Lucid, informative, readable. It goes behind the numbers to give readers insight into what works and what doesn't -- and why -- in using economic analysis to improve environmental decision making." -- William K. Reilly, former administrator, U.S. Environmental Protection Agency For years, the Environmental Protection Agency has been conducting programmatic "economic analyses," also known as Regulatory Impact Analyses (RIAs), to assess the economic effects of its regulatory efforts. This important new volume explains the purpose of these analyses, along with their design, execution, conclusions, and their ultimate impact on environmental rules. Morgenstern, formerly director of EPA's Office of Policy Analysis, has assembled twelve original case studies of RIAs performed over the past decade. The contributors, most of whom actually worked on these RIAs, provide detailed examination of why and how they were performed. They critique the nature, amount, and quality of data used by the EPA in their benefit-cost and cost-effectiveness analyses as well as the subsequent utilization of that data in decisionmaking. The authors illustrate how the analyses take into account difficult issues such as discounting, risk, nonmonetized benefits and costs, and equity. Morgenstern provides historical context and the legal framework for requiring and conducting EAs, including the basic procedure outlined by the Clinton administration in 1996. He synthesizes the studies into thoughtful general conclusions, drawing important lessons that will improve future analyses.