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3. Statutory Authorities for Economic Analysis

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By using the phrase “to the extent permitted by law” to qualify the directive that agencies consider the RIAs in their rulemaking, Executive Order 12291 recognized that there may be instances in which Congress has directed an agency to base its rulemaking on considerations other than those of maximizing net benefits. Executive Order 12866 contains similar qualifier "unless a statute requires another regulatory approach" in directing federal agencies to quantify the costs and benefits of proposed major regulations.

The U.S. Environmental Protection Agency is authorized to issue regulations under several different acts of Congress. These include the Clean Air Act; the Clean Water Act; the Safe Drinking Water Act; the Toxic Substances Control Act; the Resource Conservation and Recovery Act; the Comprehensive Environmental Response, Compensation and Liability Act; the Superfund Amendments and Reauthorization Act; the Federal Insecticide, Fungicide, and Rodenticide Act; the Food Quality and Protection Act; the Pollution Prevention Act; and the Atomic Energy Act and its amendments, including the Uranium Mill Tailings Radiation Control Act.

Some of these laws give EPA relatively broad flexibility to use economic criteria in the decision-making process. With other laws, however, EPA’s use of economic analysis is circumscribed by the enabling legislation. Table 3-1 summarizes how the analyses permitted under these acts (designated with an "X" in the table) compare with the economic analyses required under Executive Orders 12291 and 12866 and provides links to the discussions of the major individual acts. The Pollution Prevention Act and other environmental laws are discussed separately. As can be seen, although none of the environmental statutes specifies an analysis of net benefits as part of the rulemaking process, many statutes direct EPA to consider most, if not all, of the benefit and cost categories that are required for determining net benefits.

Table 3-1
Analyses Specified in EPA’s Enabling Legislation
Benefits
Costs
Act/Regulation
Pollution Reduction
Health
Welfare/
Envrnmnt
Compliance Costs
Cost- Effect
Economic
Impacts
Clean Air Act
NAAQS - Primary
X
NAAQS - Secondary
X
Hazardous Air Pollutants
X
X
New-Source Standards
X
*
*
**
**
**
Motor Vehicle Standards***
X
X
X
X
X
X
Aircraft Emissions
X
X
X
X
X
Fuel Standards***
X
X
X
X
Clean Water Act
Point Sources
X
****
X
X
X
Publicly Owned Treatment Works
X
Safe Drinking Water Act
Max. Contaminant Level Goals
X
Maximum Contaminant Levels
X
X
X
X
Toxic Substances Control Act
X
X
X
X
X
X
Resource Conservation and Recovery Act
X
X
Comprehensive Environmental
Response, Compensation and
Liability Act
Reportable Quantities
X
X
National Contingency Plan
X
X
Federal Insecticide, Fungicide,
and Rodenticide Act
Data Requirements
X
Minor Uses
X
X
X
X
X
X
Atomic Energy Act
Radioactive Wastes
X
X
X
Uranium Mill Tailings
X
X
X
X
X
X

* Includes non-air-quality health and environmental impacts only.
** Statute refers only to “cost.”
*** Type of analysis depends on grounds for control.
**** Includes non-water-quality environmental impacts only.

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