Business Roundtable Comments to EPA on Costs and Benefits in the Rulemaking Process

August 13, 2018

Business Roundtable Comments on EPA Advance Notice of Proposed Rulemaking

Increasing Consistency and Transparency in Considering Costs and Benefits in the Rulemaking Process

Docket ID No. EPA-HQ-OA-2018-01071 


Federal regulation has a profound effect on U.S. businesses. Business Roundtable recognizes that many regulations are essential and help ensure, among other things, that products are safe, the environment is adequately protected, and marketplaces are fair, open, and competitive. Regulations also impose significant costs on consumers and businesses and can affect economic growth and employment. As a result, it is imperative that federal agencies carefully – and transparently – consider the positive and negative impacts of proposed rules. Cost-benefit analysis is the best available tool to evaluate these tradeoffs.  


Most federal agencies — including the Environmental Protection Agency (EPA) —assess the costs and benefits of proposed and final regulations that could have a significant effect on the economy. Under federal policy since 1993, regulations should only proceed when the benefits justify the costs. Cost-benefit requirements have enjoyed broad bipartisan support since they were first introduced: They help to ensure that the tradeoffs inherent in any regulation are described, quantified and evaluated when regulatory options are proposed and before a rule is finalized. In short, cost-benefit analysis is essential to ensuring that federal regulators find the right balance between the positive impact rules are intended to produce and the costs those rules impose. 


It is important that all federal agencies, including EPA, develop accurate and transparent cost-benefit analyses for economically significant regulatory actions. Across the federal government, EPA’s rules accounted for more than 80 percent of the monetized benefits and more than 70 percent of the monetized costs of all regulations over the 10-year period from 2007-2016. Rules made under the authority of the Clean Air Act account for more than 95 percent of the benefits attributable to EPA regulation. Clearly, the processes and methods EPA uses to estimate regulatory costs and benefits are of critical importance and should represent best practices. EPA is among the best agencies at monetizing costs and benefits, yet it still has significant room for improvement — as the Office of Management and Budget (OMB) and the National Academy of Sciences have both noted.


Business Roundtable commends EPA for committing to improve its process through regulation and seeking public comment through this Advance Notice of Proposed Rulemaking (ANPRM). Business Roundtable shares the agency’s desire to develop more accurate estimates of costs and benefits while clearly and transparently recognizing the limitations, uncertainty and imprecision associated with such analysis. This effort will better inform agency decision-makers, the regulated community and the public about a regulation’s likely impact — and, ultimately, create a more effective regulatory system.