Home Business & Economics Retrospective cost analyses of EPA regulations: a case study approach
Article
Licensed
Unlicensed Requires Authentication

Retrospective cost analyses of EPA regulations: a case study approach

  • Elizabeth Kopits , Al McGartland , Cynthia Morgan , Carl Pasurka , Ron Shadbegian , Nathalie B. Simon EMAIL logo , David Simpson and Ann Wolverton
Published/Copyright: November 5, 2014
Become an author with De Gruyter Brill

Abstract

EPA has conducted several ex post assessments of regulatory compliance costs, with the ultimate goal of identifying ways to improve ex ante cost estimation. The work to date has culminated in four case studies that examine five regulations using a common conceptual framework. The standardized framework provides a systematic way to investigate key drivers of compliance costs to see if judgments can be made about why and how ex ante and ex post estimates of costs differ. In addition to describing this conceptual framework, we describe the criteria used to select the rules to be analyzed, summarize the main hypotheses for why ex ante and ex post cost estimates may differ and discuss some of the challenges encountered in conducting these ex post analyses.


Corresponding author: Nathalie B. Simon, National Center for Environmental Economics, U.S. Environmental Protection Agency, 1200 Pennsylvania Ave., NW; Washington, DC 20460, USA, e-mail:

Acknowledgments

This report has benefited greatly from comments received from EPA’s Program Offices, members of EPA’s Science Advisory Board, and two anonymous reviewers. For the complete SAB Advisory report, see http://yosemite.epa.gov/sab%5Csabproduct.nsf/2596DA311EE5DBF385257B4A00691B3C/$File/EPA-SAB-13-002-unsigned.pdf.

References

Adler, Jonathan. (1996). Behind the green curtain. Regulation, 4, 26–34.Search in Google Scholar

Anderson, J. F., & Sherwood, T. (2002). Comparison of EPA and other estimates of mobile source rule costs to actual price changes. Paper presented at the SAE Government Industry Meeting, Washington, DC, May 14, 2002.10.4271/2002-01-1980Search in Google Scholar

Bailey, Peter D., Haq, Gary, & Goudson, Andy. (2002). Mind the gap! Comparing ex ante and ex post assessments of the costs of complying with environmental regulation. European Environment, 12(5), 245–256.10.1002/eet.303Search in Google Scholar

Boardman, Anthony E., Mallery, Wendy L., & Vining, Aidan R. (1994). Learning from ex ante/ex post cost-benefit comparisons: The Coquihalla Highway example. Socio-Economic Planning Sciences, 28(2), 69–84.10.1016/0038-0121(94)90007-8Search in Google Scholar

Burtraw, D., & Palmer, K. (2004). SO2 cap-and-trade program in the United States: A ‘living legend’ of market effectiveness. In Winston Harrington, Richard D. Morgenstern & Thomas Sterner (Eds.), Choosing environmental policy: Comparing instruments and outcomes in the United States and Europe. Washington D.C.: Resources for the Future.Search in Google Scholar

Busse, Meghan R., & Keohane, Nathaniel O. (2007). Market effects of environmental regulation: Coal, railroads, and the 1990 Clean Air Act. RAND Journal of Economics, 38(4), 1159–1179.10.1111/j.0741-6261.2007.00130.xSearch in Google Scholar

Carlson, C., Burtraw, D., Cropper, M., & Palmer, K. (2000). SO2 control by electric utilities: What are the gains from trade? Journal of Political Economy, 108(6), 1292–1326.10.1086/317681Search in Google Scholar

Chan, G., Stavins, R., Stowe, R., & Sweeney, R. (2012). The SO2 allowance trading system and the Clean Air Act amendments of 1990: Reflections on twenty years of policy innovation. White paper. Kennedy School of Government, Harvard University.10.3386/w17845Search in Google Scholar

Dale, Larry, Antinori, Camille, McNeil, Michael, McMahon, James E., & Fujita, Sydny K. (2009). Retrospective evaluation of appliance price trends. Energy Policy, 37(2), 597–605.10.1016/j.enpol.2008.09.087Search in Google Scholar

Dayton, Julia. (1998). World Bank HIV/AIDS interventions: Ex ante and ex post evaluations. World Bank Publication 389.10.1596/0-8213-4251-7Search in Google Scholar

E.O. 13610. (2012) “Identifying and reducing regulatory burdens.” FR 77(93), May 14, 2012. Retrieved from: http://www.whitehouse.gov/sites/default/files/docs/microsites/omb/eo_13610_identifying_and_reducing_regulatory_burdens.pdf).Search in Google Scholar

Grosse, Scott D., Waitzman, Norman J., Romano, Patrick S., & Mulinare, Joseph. (2005). Reevaluating the benefits of folic acid fortification in the United States: Economic analysis, regulation, and public health. American Journal of Public Health, 95(11), 1917–1922.10.2105/AJPH.2004.058859Search in Google Scholar

Hahn, Robert. (1996). Regulatory reform: What do the government’s numbers tell us?” In Robert Hahn (Ed.), Risks, Costs, and Lives Saved: Getting Better Results from Regulation (pp. 208–255). New York, NY: Oxford University Press.Search in Google Scholar

Hammitt, J. (2000). Are the costs of proposed environmental regulations overestimated? Evidence from the CFC phaseout. Environmental and Resource Economics, 16(3), 281–302.10.1023/A:1008352022368Search in Google Scholar

Harrington, W., Morgenstern, R. D., & Nelson, P. (2000). On the accuracy of regulatory cost estimates. Journal of Policy Analysis and Management, 19(2), 297–322.10.1002/(SICI)1520-6688(200021)19:2<297::AID-PAM7>3.0.CO;2-XSearch in Google Scholar

Heinzerling, Lisa, & Ackerman, Richard. (2002). Pricing the priceless: Cost benefit analysis of environmental protection. University of Pennsylvania Law Review, 150, 1553–1584.Search in Google Scholar

Hodges, Hart. (1997). Falling prices: Cost of complying with environmental regulations almost always less than advertised. Economic Policy Institute Briefing Paper. Washington, DC: Economic Policy Institute.Search in Google Scholar

James, H. S. Jr. (1998). Estimating OSHA compliance costs. Policy Sciences-Special Issue onRegulatory Budgeting, 31, 321–324.Search in Google Scholar

Jantzen, J. (1989). Costs of environmental management, 1988 – 2010, 3 policy scenarios. Report for the Ministry of VROM, The Hague, 25 May 1989.Search in Google Scholar

Joskow, Paul. (1988). Asset specificity and the structure of vertical relationships: Empirical evidence. Journal of Law, Economics and Organization, 4(1), 95–117.10.1093/jleo/18.1.95Search in Google Scholar

Kerwin, C. M., & Furlong, S. (1992). Time and rulemaking: An empirical test of theory. Journal of Public Administration Research and Theory, 2(2), 113–138.Search in Google Scholar

LaFrance, Jeffrey T., & de Gorter, Harry. (1985). Regulation in a dynamic market: The U.S. dairy industry. American Journal of Agricultural Economics, 67(4), 821–832.10.2307/1241822Search in Google Scholar

Lindner, R. K., & Jarrett, F. G. (1978). Supply shifts and the size of research benefits. American Journal of Agricultural Economics, 60(1), 48–58.10.2307/1240160Search in Google Scholar

MacLeod, Michael, Moran, Dominic, Aresti, Manuel Lago, Harrington, Winston, & Morgenstern, Richard. (2006). Comparing the ex ante and ex post costs of complying with regulatory change. Final Report to DEFRA. London: Department for Environment, Farms, and Rural Affairs.Search in Google Scholar

Maloney, Michael T., & McCormick, Robert E. (1982). A positive theory of environmental quality regulation. Journal of Law and Economics, 25(1), 99–123.10.1086/467009Search in Google Scholar

Morgenstern, Richard D., & Landy, Mark K. (1997). Economic analysis: Benefits, costs, implications. In Richard D. Morgenstern (Ed.), Economic Analyses at EPA: Assessing Regulatory Impact, Washington, D.C.: Resources for the Future.Search in Google Scholar

NRC (National Research Council). (2012). Review of the EPA’s economic analysis of final water quality standards for lakes and flowing waters in Florida. Washington, DC: The National Academies Press.Search in Google Scholar

Office of Technology Assessment (OTA). (1995). Gauging control technology and regulatory impacts in occupational safety and health: An appraisal of OSHA’s analytic approach. OTA-ENV-635. Washington DC: Government Printing Office.Search in Google Scholar

Oosterhuis, F., des Abbayes, C., Görlach, B., Huybrechts, D., Jarvis, A., Kuik, O., Medhursi, J., Meynaerts, E., Monier, V., Ekins, P., Jantzen, J., Vanner, R., Vercaemst, P., & van der Woerd, H. (2006). Ex post estimates of costs to business of EU environmental legislation: Final report. Amsterdam: Institute for Environmental Studies. Retrieved from http://ec.europa.eu/environment/enveco/ex_post/pdf/costs.pdf.Search in Google Scholar

Porter, Michael. (1991). America’s green strategy. Scientific American, 264(4), 96.Search in Google Scholar

Popp, D. (2003). Pollution control innovations and the Clean Air Act of 1990. Journal of Policy Analysis and Management, 22(4), 641–660.10.1002/pam.10159Search in Google Scholar

Popp, David, Richard G. Newell, & Adam B. Jaffe. (2010). Energy, the Environment, and Technological Change, In Bronwyn H. Halland and Nathan Rosenberg: Handbook of the Economics of Innovation- Vol-II, Burlington: Academic Press, pp. 873–938.Search in Google Scholar

Putnam, Hayes, & Bartlett, Inc. (1980). Comparisons of estimated and actual pollution capitalexpenditures for selected industries. Report Prepared for the Office of Planning and Evaluation, U.S. Environmental Protection Agency, Cambridge, MA. (mimeo).Search in Google Scholar

Rideout, Douglas B., & Omi, Philip N. (1995). Estimating the cost of fuels treatment. Forest Science, 41(4), 664–674.Search in Google Scholar

RIVM. (2000). Techno 2000; “Modellering van de daling van eenheidskosten van technologieën in de tijd”. Rapportnummer 773008003, Bilthoven, April 2000.Search in Google Scholar

Sappington, David E. M., & Stiglitz, Joseph E. (1987). Privatization, information and incentives. Journal of Policy Analysis and Management, 6(4), 567–585.10.2307/3323510Search in Google Scholar

Thompson, Kimberley M., Sequi-Gomez, Maria, & Graham, John D. (2002). Validating benefit and cost estimates: The case of airbag regulation. Risk Analysis, 22(4), 803–811.10.1111/0272-4332.00070Search in Google Scholar

U. S. Environmental Protection Agency (EPA). (2010). Guidelines for Preparing Economic Analyses. EPA 240-R-10-001. December 2010. Retrieved from http://yosemite.epa.gov/ee/epa/eed.nsf/pages/guidelines.html.Search in Google Scholar

U.S. Office of Management and Budget (OMB). (1998). Report to Congress on costs and benefits of federal regulations: Appendix. Washington, DC: GPO.Search in Google Scholar

U.S. Office of Management and Budget, Office of Information and Regulatory Affairs (OMB). (2005). Validating Regulatory Analysis: 2005 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities.Search in Google Scholar

U.S. Office of Management and Budget (OMB). (2014). Draft Report to Congress on the Benefits and Costs of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities.Search in Google Scholar


Article note

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of the U.S. Environmental Protection Agency.


Published Online: 2014-11-5
Published in Print: 2014-6-1

©2014 by De Gruyter

Downloaded on 19.12.2025 from https://www.degruyterbrill.com/document/doi/10.1515/jbca-2014-0024/html
Scroll to top button