Upcoming research from Resources for the Future examines how the rescission of the endangerment finding may affect public health, the environment, and the US economy.
In February of this year, the US Environmental Protection Agency (EPA) rescinded the endangerment finding, which was the federal government’s formal scientific determination, first articulated in 2009, that greenhouse gases endanger public health and welfare. The endangerment finding provided the legal basis for EPA to regulate and set limits on greenhouse gases. By repealing the finding, EPA has made future federal efforts to reduce carbon dioxide emissions—and to combat climate change—exceedingly difficult under the Clean Air Act.
In the same action, EPA also repealed all federal greenhouse gas emissions standards for vehicles that were issued as a direct result of the endangerment finding. EPA has also proposed the repeal of greenhouse gas standards placed on the power sector. These actions paint a stark and troublesome picture of the future of air quality, climate change, and public health in the United States, potentially threatening decades’ worth of dramatic improvements in environmental quality.
Upcoming research from Resources for the Future (RFF) develops and applies a framework consistent with standard economic guidance to quantify the full benefits and costs of recent regulatory actions. Beginning with this blog post, we will discuss this framework and our findings in a blog series on the consequences of rolling back major environmental rules, including vehicle emissions standards and power sector emissions standards. The series will culminate in a blog post that highlights key findings from a forthcoming report on the health, environmental, and economic impacts of these deregulatory actions.
These actions paint a stark and troublesome picture of the future of air quality, climate change, and public health in the United States, potentially threatening decades’ worth of dramatic improvements in environmental quality.
Although executive orders have required the evaluation of costs and benefits of regulatory actions for more than 40 years, and standard economic guidance fully supports benefit-cost analysis, the Trump administration has taken unprecedented steps to ignore the climate and health damages of its proposed and final regulatory actions.
Specifically, the administration’s analyses justifying the repeal of greenhouse gas rules for vehicles seriously downplay the public health benefits of those regulations. EPA’s benefit-cost analyses assign no value to the social costs of higher greenhouse gas emissions caused by regulatory repeals. The analyses also ignore all the health benefits of air-quality improvements caused by greenhouse gas regulations; EPA asserts that uncertainties are so large that they prevent the agency from providing any quantified or monetized estimates of health benefits, an assertion wildly out of step with decades of advice from scientific and economic advisory panels.
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As a result, EPA has failed to provide accurate information about the impact of regulatory rollbacks on the American public and the economy. In response, some external groups have stepped in to offer their assessments of the benefits and costs of rollbacks, often generating estimates based on the analyses EPA produced when the regulations were originally promulgated. Oftentimes, these third-party estimates reverse the signs in EPA’s original analyses; the original estimated benefits of a rule become the cost of its reversal, while the original costs become the cost savings. These ballpark estimates fill a valuable gap, but they do not fully capture the effects of rollbacks.
Why? First, the economic conditions that existed when past administrations put the rules in place differ from the conditions that exist today. The costs and benefits of a rollback are affected by both technological advancements—some of which, like improvements in electric vehicle technologies, were driven by the original regulations—and market advancements, like the rapid growth in electricity demand for data centers.
The complex relationships between electric vehicles, electricity demand, and power production also shape the effects of regulations. Greater adoption of electric vehicles shifts pollution generation from vehicles to the power sector, and the impact of that shift depends on regulations for both vehicles and power plants and on other forces affecting these sectors, such as the build-out of renewable electricity–generating capacity.
Second, complex interactions between regulations (and the sequence in which they are repealed) can change the consequences of rollbacks and how those consequences are attributed. These interactions are particularly important to consider given the current series of administrative actions that affect both vehicles and electricity generation. The cumulative harms of multiple rollbacks can be greater than the sum of the effects of each rollback evaluated independently, particularly if one regulation serves as an effective backstop to another. For example, EPA limits how much nitrogen oxide and particulate matter vehicle engines can emit, and these regulations may prevent some of the adverse air-quality effects that otherwise would result from repealing greenhouse gas standards.
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To help quantify the true effects of these regulatory rollbacks, researchers at RFF, along with research partners with expertise in air-quality modeling and public health, are developing a comprehensive analysis of the effect of the Trump administration’s actions to rescind the endangerment finding and roll back major environmental regulations.
Our approach involves linking RFF’s in-house models of the light-duty vehicle fleet and the power sector to estimate the impact of repealing greenhouse gas standards for light-duty vehicles, greenhouse gas standards for fossil fuel–fired power plants, and emissions standards for criteria air pollutants. We will use EPA’s Environmental Benefits Mapping and Analysis Program to estimate the health impacts of the resulting changes in county-level ambient air quality. Using this approach, we can estimate air quality and public health damages at the national and county levels.
Although regulations on heavy-duty vehicles are also being rolled back as a result of the endangerment finding rescission, our transportation models are focused on light-duty vehicles. Our analysis will therefore underestimate the full impact of the rescission.
In building this linked-model approach, we aim to develop a framework that can continue to be used to evaluate future regulatory actions under rapidly changing policy and economic conditions.
We will estimate the net impact of the rollbacks by combining our estimates of health damages with estimates of the cost savings from the repeal and the social costs of greenhouse gas emissions. Our analyses will focus on baselines and policy scenarios that reflect the effect of regulatory repeal under current and expected future market and policy conditions. We will take into account, among other things, projected increases in energy demand from data centers, the recent elimination of most of the provisions in the Inflation Reduction Act, and the announced repeal of other regulations on greenhouse gases and conventional air pollutants.
In building this linked-model approach, we aim to develop a framework that can continue to be used to evaluate future regulatory actions under rapidly changing policy and economic conditions.
One caveat to our approach is that it will not fully capture the broad spectrum of potential impacts from the rescission of the endangerment finding. The endangerment finding itself enabled scientifically sound, evidence-based rulemaking. By limiting the ability of future administrations to make evidence-based rules to protect public health and welfare based on the best available science, the rescission of the endangerment finding also limits future regulatory actions that could have generated net-positive benefits; for example, greenhouse gas standards for later-model-year vehicles. These forgone benefits are not captured in our modeling scenarios (nor, indeed, in any modeling that we have seen,) but are a critical part of understanding the full impact of this administration’s actions. Future applications of our framework could assess the benefits of these foregone regulations and provide a more comprehensive picture of the impacts of the recission.
Scientifically and economically sound benefit-cost analyses are important for understanding and developing regulations that provide net benefits to the American public. By failing to follow EPA’s own peer-reviewed guidelines for economic analysis, the administration has drawn a misleading picture of the effects of its regulatory rollbacks on air quality, climate change, and human health. We hope to help fill this gap by offering sound analysis that can help policymakers and the public better understand and prepare for the effects of these deregulatory actions.
