Environmental Protection:

Assessing Impacts of EPA's Regulations Through Retrospective Studies

RCED-99-250: Published: Sep 14, 1999. Publicly Released: Sep 14, 1999.

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Pursuant to a congressional request, GAO provided information on efforts to assess the economic impact of the Environmental Protection Agency's (EPA) regulations to enhance environmental quality, focusing on: (1) to what extent EPA's regulations have been the subject of retrospective studies; (2) whether retrospective studies are viewed as useful or difficult to do; and (3) ways to foster such studies in the future.

GAO noted that: (1) assessments of the costs and the benefits of EPA's regulations after they have been issued have rarely been done; (2) of the 101 economically significant regulations issued by EPA from 1981 through 1998, only five were the subject of retrospective studies; (3) various sources--including Congress, EPA, and academia--have provided the impetus for these studies, which were all completed from 1997 through 1999; (4) these studies covered regulations designed to, among other purposes, control acid rain, phase out chlorofluorocarbons, and reduce air pollution through improved vehicle inspection and maintenance; (5) authors of retrospective studies, EPA officials, and other experts told GAO that these studies have been or can be useful but also pose a number of difficulties for researchers; (6) in terms of usefulness, retrospective studies have provided insights into a new, market-based regulatory approach to reduce emissions that cause acid rain; (7) these studies found that the actual costs of reducing emissions were lower than initially estimated; (8) based on these findings, a legislative proposal to further limit emissions has been introduced; (9) retrospective studies are viewed as difficult to do because, among other reasons, it is difficult to obtain valid cost data from regulated entities; (10) it is extremely difficult to quantify actual benefits; (11) one reason is that a significant time lag usually exists between the elimination or major reduction of pollutants and any corresponding change in illness rates; (12) GAO found that a systematic approach by EPA would foster retrospective studies in the future; (13) while all economically significant regulations, by executive order, are subject to a prospective economic assessment, EPA is not expected to calculate the actual costs and benefits for all of these regulations; (14) accordingly, EPA officials told GAO that they have used the agency's limited resources on prospective economic assessments--which EPA must perform--rather than on retrospective studies; and (15) based on discussions with study authors, EPA officials, and other experts, GAO found that the resource constraints and the difficulties in conducting retrospective studies could be better addressed if EPA were to develop a plan to foster studies of the actual costs and benefits of environmental regulations.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendation for Executive Action

    Recommendation: To help determine if existing environmental regulations need to be retained or improved, the Administrator, EPA, should establish a plan to study the actual costs and benefits of such regulations, including when and how to use retrospective studies as an integral part of its approach. The plan should target selected regulations for review based on a systematic identification of candidate regulations, an assessment of the feasibility of studying those regulations retrospectively, and an identification of the resources needed.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Not Implemented

    Comments: While EPA states that it supports economic research and analysis to investigate the economic costs and benefits of federal government regulations, EPA does not agree with GAO's recommendation to develop a plan to study the actual costs and benefits of its environmental regulations and target selected regulations for review. EPA believes that such retrospective studies are best suited at measuring aggregate expenditures for all environmental requirements and are not well suited to evaluating the costs and benefits of specific regulations. In addition, EPA cites difficulties in conducting retrospective studies. EPA notes that it has attempted some retrospective analyses of the benefits and costs of its regulations at the "program" level such as the 1997 and 1999 reports to Congress on the costs and benefits of the the Clean Air Act and the 1990 amendments and that other similar efforts are being pursued for other agency programs, in part to support OMB's requirements to report to Congress on the costs and benefits of all federal regulations.

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