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News from EPI EPI report tallies impact of Obama administration EPA rules

For Immediate Release: Tuesday, May 31, 2011
Contact: Phoebe Silag or Karen Conner, 202-775-8810

EPI report tallies impact of Obama administration EPA rules

New Environmental Protection Agency (EPA) regulations formulated by the Obama Administration will be of tremendous benefit to public health, and the combined cost of the rules – both finalized and proposed – will not stifle economic or job growth in the near-term or in the future, concludes a new study released today by the Economic Policy Institute (EPI).  Tallying up the impact of new EPA rules, by EPI Director of Regulatory Policy Research Isaac Shapiro, is the only comprehensive tally of the new major EPA rules, combining a wide range of cost and benefit estimates that have previously been discussed separately but not in combination.  It debunks arguments that the cumulative impact of these rules would harm the struggling economy. 

The study finds that the combined annual benefits from all the major EPA regulations finalized so far under the Obama Administration exceed their costs by $32 billion to $142 billion a year (the report focuses just on major rules for which cost-benefit data are available).  This reflects a benefit-to-cost ratio ranging from 4-to-1 to 22-to-1.  The costs are small — representing only a tiny fraction of the economy (0.1 percent) – but the benefit in lives saved and illnesses avoided when there is less mercury, dioxin, and other deadly pollutants in the air and water is enormous

Shapiro includes a similar analysis of the administration’s proposed major rules, with even more striking results.  The combined annual benefits from the four proposed rules examined in the report exceed their costs by $160 billion to $440 billion a year.  The benefit/cost ratio ranges from 12-to-1 to 32-to-1. 

Even if all the final and proposed major rules are added together, their costs are still modest.  When fully in effect in 2020, the combined costs of the major EPA rules finalized and proposed so far during the Obama Administration would amount to about 0.3 percent of the economy (this particular combined calculation overstates costs somewhat because it entails some unavoidable double-counting). 

“The results of this uniquely comprehensive study clearly show how modest the costs of these regulations are relative to the size of the economy.  When you factor in the extended period over which they will take effect, these rules will not stifle economic or job growth,” said Shapiro. 

The health benefits from the rules finalized and proposed by the administration would be great, concluded the study.  For instance, the proposed air toxics rule, which regulates the amount of hazardous pollutants emitted, would have the following estimated health benefits in 2016:

  • 6,800–17,000 lives saved 
  • 11,000 fewer heart attacks
  • 12,200 fewer hospital and emergency room visits
  • 225,000 fewer cases of respiratory symptoms
  • 850,000 more work days (because workers are not too sick to go to work)

 “Too often, the debate over environmental regulation is dominated by rhetorical claims that ignore the benefits of protecting the environment and public health,” said Michael Livermore, executive director of the Institute for Policy Integrity at New York University School of Law.  “The careful estimates in EPI’s report shed essential light on EPA’s sound use of cost-benefit analysis and suggest that the Obama Administration’s environmental rules would substantially benefit the American public without entailing large costs to the economy.”

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