The current federal regulatory system is already complicated enough. But when the federal government tells us it is regulating one thing while it really regulates something else, it is almost impossible for citizens to understand what they are getting and what they are paying for. When a business commits such “bait and switch” practices, the business violates federal consumer protection laws. But “bait and switch” by the government is legal since the government is not held to any clear standards. Let me explain.

Under the current federal regulatory system, the people who actually pay the price tag for new multibillion dollar rules – “the regulatory consumer” – ought to be able to clearly know what they are being asked to “buy” and what they should expect in return. A recent U.S. Chamber of Commerce study, Truth in Regulating: Restoring Transparency to EPA Rulemaking, found that in recent years, however, the Environmental Protection Agency has not been open about what pollutants it is regulating or the true costs and benefits of the most costly federal rules. The report’s focus is on EPA because that agency has written seventeen of the thirty costliest rules over the past decade. The high price tags of these rules are paid for by businesses, in the form of reduced earnings, and by consumers, through higher prices and lost jobs and income.

Over the past decade, EPA has not told the public what benefits they are really getting out of new rules or what they are paying for. Specifically, the agency cites estimated benefits from reductions in fine particulate matter (PM^2.5) to justify regulatory actions that go after entirely different pollutants, such as mercury. EPA tells the public that a new multi-billion-dollar regulation is a mercury reduction rule, and claims that there are enormous estimated benefits from reducing mercury. In fact, the rule’s mercury reductions have tiny health benefits—just six million dollars, according to EPA—out of $62 billion in estimated benefits. Because PM^2.5 is a pollutant that is already controlled by its own stringent air quality standards, and is currently well below (25–30% below) the level that EPA itself considers safe for virtually every American, “the regulatory consumer” is essentially paying for a first class airfare and only getting to sit in coach. But “the regulatory consumer” is never given the chance to see what it is “buying” or whether it is getting a good deal.

Imagine if the National Highway Transportation Safety Administration (NHTSA) told the American public that a new rule that would impose $11 billion in costs on consumers in order to improve highway safety, but it turns out that the rule only has a $5 million safety benefit. The rest of the rule’s benefits come entirely from electric vehicle incentives and associated fuel savings. The public would think it had been misled and the rule was a waste of money. But that is essentially what EPA has been doing.

Imagine EPA telling the public that it was imposing $510 million in costs on consumers to clean up hazardous air emissions from Portland cement plants, when the rule would actually have zero dollars of non-PM ^2.5 benefits. The public would think it a waste of money. But that is exactly what EPA has done.

Imagine EPA telling the public that it was imposing $1.1 billion in costs on consumers to remove SO² but there was only going to be a $2.4 million benefit from reducing SO² and all other benefits would come from reducing PM^2.5. The public would think it a waste of money. But that is exactly what EPA has done.

The point of this exercise is that EPA should tell the public what the cost is for reducing the specific pollutants it says it is reducing. And if it wants to reduce PM^2.5, then it should reduce it under the National Ambient Air Quality Standards for PM^2.5, as Congress intended. EPA finds it difficult to be honest because if it was honest it would have to tell the public that it is spending taxpayer money to reduce a pollutant, PM^2.5, which is already more than 25% below the standard EPA considers protective of human health with an adequate margin of safety.

Of all EPA rules for the years 2000 to 2013, 92 % of all costs were imposed on the public to reduce PM^2.5 and 97.2% of all benefits claimed by EPA were for reducing PM^2.5, notwithstanding the fact the actual levels of PM^2.5 are below EPA’s standards.

Greater transparency and accountability are needed in the regulatory process, in order to restore the public’s trust in the regulatory system. To achieve Truth in Regulating, EPA must:

• Tell “the regulatory consumer” exactly what pollutants are targeted in each regulation.
• Tell “the regulatory consumer” exactly how much each reduction of each separately targeted pollutant will cost.
• Inform “the regulatory consumer” of the rule how much each targeted pollutant will be reduced and how those reductions will benefit the public.
• Move away from relying on inflated benefits estimates for purely incidentally reduced pollutants like PM⁵ to justify overly stringent regulations on other pollutants.

For “the regulatory consumer” to have confidence that EPA is choosing the “right” level of regulatory protection, the public needs more information about why the agency chose one level of regulatory stringency over other alternatives available to it. Only when armed with this important information can the public decide if the agency is acting in their best interests.

The full report mentioned in the post can be found here: https://www.uschamber.com/report/truth-regulating-restoring-transparency-epa-rulemaking