Rankin Column: EPA Cost-Benefit Proposal much needed reform for the future

The Federal Environmental Protection Agency (EPA) finalized a new rule this month, establishing the criteria for conducting a cost-benefit analysis on any future rule they propose. Why should Colorado state agencies not do the same?

In both business and government, having a clear picture of the future is critically important. As a retired engineer and business owner, I know firsthand that having access to firm and reliable information leads to success. And as a member of the Joint Budget Committee that directs the spending of Coloradan’s tax dollars, I know how important it is to have a complete picture. Additionally, we must include all the relevant facts to ensure that our hard-earned tax dollars are allocated as wisely and efficiently as possible.

A big part of that is conducting a cost-benefit analysis of any major decision, ensuring that the benefits of a proposed new project or course of action are weighed carefully against the costs. In the private sector, this is done regularly to ensure that managers have a clear picture of the consequences of their actions going forward.

So it is incredibly disappointing that the government fails to do a cost-benefit analysis on the rules it imposes on us, rules which can impact millions of people for years down the line.

Take a couple of recent examples, a) the state Air Quality Control Commission (AQCC) last month announced a preliminary final action to force the closure of the Craig power plant two years earlier than was previously agreed. There was also a decision by the Colorado Oil and Gas Conservation Commission (COGCC) to enact more extensive setback rules, effectively disregarding the will of the voters who rejected similar practices at the ballot box two short years ago.

It is outrageous that any state agency can make such enormous decisions, potentially impacting thousands of Coloradans, without anyone even thinking to evaluate those impacts in relation to the benefits they are supposed to achieve.

Even the federal government does better. Last Tuesday, the EPA announced the finalization of a new rule to strengthen and codify their cost-benefit analysis process on every new regulation. Under this new rule, the EPA requires definitions and metrics consistently so that any future rule can be neither over- nor under-stated, and the costs neither exaggerated nor dismissed. These are common-sense requirements that emphasize facts, science, and reality rather than political agendas.

Presidents have supported the type of cost-benefit approach the EPA has adopted for decades. Still, it has never been implemented with the kind of specificity and accountability the EPA has now enacted. That’s good news for Coloradans and all Americans since the EPA is the federal government’s largest single agency when it comes to new regulations, which alone cost our national economy well over $1 trillion each year.

The clear guidance offered by the rule will make for more efficient and accurate evaluations of regulations, meaning robust protections for the environmental resources we all share and cherish, without compromising our local communities’ economic health. Local governments, businesses, and the public will be allowed to fully understand the various impacts of a rule so they can plan accordingly.

In my view, the state should take the EPA’s lead in this regard. Such an analysis needs to be a pre-requisite for any new regulation. As it stands, state law allows anyone to request a cost-benefit analysis on a proposed agency rule, but only within five days after publication of the proposed rule-making notice. Even then, the Department of Regulatory Agencies’ Executive Director can make the final determination whether or not to conduct one.

The onus should not be on the public to watch for new state regulations every day and then go hat in hand to the government to ask for it to be appropriately evaluated. A cost-benefit analysis should be automatically initiated for any rule a state agency proposes. It’s just common sense and good government.

At least there is progress starting on the federal front. It’s time for reform, especially as businesses begin to emerge from the COVID-19 crisis. The Colorado business community supports, as all Coloradans should, the common-sense policies and objective guidelines that EPA is proposing. The state of Colorado should follow suit.

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