Comparative Analysis Of Epa Cost Benefit Methodologies

In recent years, reforming the regulatory process has received much attention from diverse groups such as environmentalists, the government, and industry. A cost-benefit analysis can be a useful way to organize and compare the favorable and unfavorable impacts a proposed action night have on society. Since 1981, two Executive Orders have required the U.S. Environmental Protection Agency (EPA) and other regulatory agencies to perform cost-benefit analyses in support of regulatory decision making. At the EPA, a cost-benefit analysis is published as a document called a regulatory impact analysis (RIA). This report reviews cost-benefit methodologies used by three EPA program offices: Office of Air and Radiation, Office of Solid Waste, and Office of Water. These offices were chosen because they promulgate regulations that affect the policies of this study's sponsor (U.S. Department of Energy, Office of Fossil Energy) and the technologies it uses. The study was conducted by reviewing 11 RIAs recently published by the three offices and by interviewing staff members in the offices. To draw conclusions about the EPA cost-benefit methodologies, their components were compared with those of a standard methodology (i.e., those that should be included in a comprehensive cost-benefit methodology). This study focused on the consistency of the approaches as well as their strengths and weaknesses, since differences in the cost-benefit methodologies themselves or in their application can cause confusion and preclude consistent comparison of regulations both within and among program offices.