Biden Rulemaking Overhaul Opens Path to Tougher Climate Policies

Proposed changes to the way federal agencies write rules would give the EPA more leeway to issue tougher regulations on air emissions, toxic chemicals, and other environmental harms, legal scholars say.

One of the biggest changes in the White House’s Thursday proposal to update Circular A-4—the federal government’s core guidance document on rule-writing—would more heavily weight regulatory benefits that won’t be fully realized until the distant future, said Rachel Rothschild, an environmental law professor at the University of Michigan Law School.

That shift means ambitious proposals whose benefits lie mostly in the future, potentially including greenhouse gas rules or standards governing chemicals that won’t cause cancer for many years, are likelier to survive the mandatory cost-benefit analysis agencies must undertake, Rothschild said.

For example, if the Environmental Protection Agency advanced a rule that envisions $5 trillion in damages from climate change 50 years from now, the current guidance would only let the agency assess the present-day benefits of the rule as either $170 billion or $1.1 trillion, depending on which of the two currently available formulas it uses.

But under the proposed changes, the value of the benefits would rise to $2.2 trillion, making it far likelier that they will outweigh the rule’s costs and therefore pass the agency’s test.

Susan Dudley, who led the office under President George W. Bush, said the White House Office of Information and Regulatory Affairs is likely to get comments questioning whether it’s more accurate to change the accounting mechanism.

OIRA has opened a 60-day comment period on the proposed revisions to Circular A-4.

Global Impacts

Another part of the 91-page proposal recommends that agencies consider the global impacts of their regulations. That change would encourage the EPA to incorporate a wider range of benefits from reducing greenhouse gas emissions when issuing regulations, according to Rothschild.

“This absolutely could help agencies impose tougher rules,” she said. “We know courts are looking much more closely at environmental regulations, so having more robust analyses of benefits will help them stand up in court.”

Cary Coglianese, a regulatory law professor at the University of Pennsylvania Law School, said, “There’s a moral case to be made that we should not be indifferent to effects on people wherever they may be located.

“And on some problems, it may be that there are positive spillover effects that come back to the US,” he said. “Those kinds of effects, even though they might initially land on some people outside the US, could redound to our benefit.”

A further piece of the proposal lets agencies measure the cost-effectiveness of their rules, rather than placing a monetary value on human life, if the agency decides the primary objective of the rule is to protect children.

“Climate change might be an example of that,” Rothschild said, because the EPA could argue that children will suffer more from strong storms, rising sea levels, and heatwaves than adults, who on average will die sooner.

Environmental Justice

Separately, several of the provisions in a new White House executive order, also released Thursday, are aimed at giving underserved communities a more prominent voice in the rulemaking process.

One new mandate tells agencies to “proactively engage” with affected parties, including members of underserved communities, when they’re developing their regulatory plans. Another section directs OIRA to more thoroughly consider meeting with non-federal employees.

“If it turns out that one segment of society is disproportionately benefiting from regulations, and another segment of society is disproportionately on the cost-bearing side, we should know that,” said Coglianese.

A 2016 paper authored by three Harvard University scholars found that the EPA, among other agencies, pays “relatively little attention” to the questions of who benefits and who pays the cost of federal regulation.

But Dudley said she worries that the change might tie up OIRA’s small staff in meetings that don’t always bring new information to light. She also noted that OIRA may struggle to know which communities haven’t asked to meet with the agency.

“By its nature, the rulemaking process is more responsive to organized interests with shared concerns than it is to the dispersed, nonorganized groups that, if you add up their concerns, may have a bigger impact,” said Dudley, now director of the George Washington University Regulatory Studies Center. “I don’t see that OIRA can change that.”

The White House recently unveiled a mapping tool to help agencies identify environmental justice communities. Those types of tools could help OIRA pinpoint groups that aren’t asking for meetings, according to Sidney Shapiro, an administrative law professor at Wake Forest University.

The executive order also raises the threshold at which OIRA must do a review from a $100 million effect on the economy to $200 million.

OIRA can still review rules that fall below the $200 million threshold if it believes they would advance the president’s priorities. The executive order further says the $200 million limit should be reviewed every three years to account for changes in gross domestic product.

Coglianese said the increased threshold has been badly needed for years, just to keep up with inflation.

Dudley agreed, but also said the effects of the change are likely to be small. Only a tiny fraction of rules meet the threshold of economic significance, she said. Moreover, over the last 20 years, those reviews are actually six days shorter than OIRA’s less-intensive reviews of rules that aren’t deemed economically significant, according to Dudley.

Petitioning the Government

The executive order also tells agencies to give the public more opportunities to petition the government—which often happens when groups want to compel an agency to issue a regulation—and to respond “efficiently” to those petitions.

That matters because agencies like the EPA often don’t regulate unless they’re forced to by a court order, and even then it can take years for them to act, according to Shapiro.

But the change cuts both ways, because industry groups also file many petitions asking for rules to be scrapped or weakened, Shapiro said.