August 18, 2014

GAO Study Says EPA Used Outdated Data to Calculate Regulations’ Impacts on Economy.

A new study by the nonpartisan U.S. Government Accountability Office found the U.S. Environmental Protection Agency has used outdated information when calculating the costs and benefits of potential regulations. Specifically the report says the EPA used a more than 20-year-old report to assess the impact regulations would have on employment. Additionally, the GAO said the EPA did not always monetize the impact of every regulation, a problem that could mean “the public may face challenges understanding the trade-offs associated with regulatory alternatives.” The GAO did not assess all EPA rulemaking, but focused on seven major regulations to arrive at its finding. 

According to The Hill the GAO recommended “the EPA take steps to improve the agency’s adherence to the existing government guidance” and that the Office of Management and Budget “clarify the best way to apply that practice to the thorny process of estimating costs and benefits of reducing greenhouse gas emissions.” Some lawmakers on Capitol Hill want more, however. After the study was released, U.S. House Science Committee Chairman Lamar Smith (R-Texas) asked that the EPA rework its economic impact assessment for it draft emissions rule for existing power plants. The EPA estimated annual compliance costs for this rule would fall between $5.4 and $7.4 billion (and increase to $8.8 billion by 2030) and that the rule would lead to electricity price increases of six to seven percent annually. Representatives of the manufacturing industry believe the costs will actually be much higher.