{"id":4643,"date":"2017-02-01T11:36:26","date_gmt":"2017-02-01T16:36:26","guid":{"rendered":"http:\/\/blogs.law.columbia.edu\/climatechange\/?p=4643"},"modified":"2017-05-11T10:38:35","modified_gmt":"2017-05-11T15:38:35","slug":"trumps-executive-order-on-regulatory-costs-is-not-only-arbitrary-it-is-also-against-the-law","status":"publish","type":"post","link":"https:\/\/blogs.law.columbia.edu\/climatechange\/2017\/02\/01\/trumps-executive-order-on-regulatory-costs-is-not-only-arbitrary-it-is-also-against-the-law\/","title":{"rendered":"Trump\u2019s Executive Order on Regulatory Costs is Not Only Arbitrary; It is Also Against the Law"},"content":{"rendered":"
<\/div>

Michael Burger and Jessica Wentz<\/strong><\/em><\/p>\n

On Monday, President Trump issued an executive order<\/a> directing all agencies to control regulatory costs by: (1) ensuring that the \u201cincremental costs\u201d of all new regulations that are finalized this year, including repealed regulations, are no greater than zero, and (2) identifying two regulations for potential repeal for every new regulation that is proposed. The order does not mention the benefits of regulation, nor does it specify how incremental costs should be calculated. It also fails to describe how agencies are supposed to comply both with the order and with their statutory mandates.<\/p>\n

The lack of explanation is telling. Indeed, the order suffers from a fundamental problem: It conflicts with statutory requirements and undermines agencies\u2019 abilities to implement those requirements faithfully. Agencies do not simply regulate for the sake of regulation \u2013 each regulation is aimed at implementing a specific provision of a statute passed by Congress. In many cases, agencies are either prohibited from considering costs or required to consider both costs and benefits when issuing regulation. And statutes do not typically, if ever, permit agencies to consider the aggregate costs of regulations across all of their programs when issuing a particular regulation.<\/p>\n

<\/p>\n

This is certainly true for many environmental statutes. Take, for example, Section 109 of the Clean Air Act<\/a>. It requires the U.S. Environmental Protection Agency (EPA) to establish national ambient air quality standards (NAAQS) for air pollutants \u201cthe attainment and maintenance of which\u2026 are requisite to protect the public health.\u201d Section 108<\/a> outlines factors that EPA should consider when setting the NAAQS, and cost is not included among those factors. As the late Justin Antonin Scalia noted in Whitman v. American Trucking Associations<\/a> (2001), the statutory language is \u201cabsolute\u201d \u2013\u00a0 it \u201cunambiguously bars cost considerations from the NAAQS-setting process, and thus ends the matter for us as well as the EPA.\u201d<\/p>\n

Other statutory provisions require agencies to weigh both costs and benefits. This is typically the case when EPA and other agencies establish technology-based performance standards for power plants, cars, and other pollution sources. The statutory provisions calling for the establishment of such standards typically require the agency to establish standards that reflect the \u201cbest system\u201d for or \u201cmaximum achievable\u201d rate of pollution reduction, taking into account costs and other factors. Such language requires agencies to compare the environmental benefits of a proposed standard with its economic costs. This is the language the Obama-administration EPA relied on in setting greenhouse gas emissions standards through the Clean Power Plan and its methane rule for oil and gas operations, among other things.<\/p>\n

When the costs of regulations are monetized, the benefits must be too. This was the rule articulated by the Ninth Circuit Court of Appeals held exactly that in Center for Biological Diversity v. National Highway Traffic Safety Administration (NHTSA) (2008)<\/a>. In that case, NHTSA had established fuel economy standards in accordance with the Energy Policy and Conservation Act of 1975, which requires NHTSA to determine the \u201cmaximum feasible average fuel economy\u201d for cars, taking into account technological feasibility and economic practicability, among other things. NHTSA had conducted a cost-benefit analysis when setting the standards in which it monetized economic costs and some environmental benefits but failed to monetize the benefit of reducing GHG emissions under different standards. The court held that this omission was arbitrary and capricious, and that NHTSA \u201ccannot put a thumb on the scale by undervaluing the benefits and overvaluing the costs of more stringent standards.\u201d<\/p>\n

The other component of the order \u2013 the requirement to identify two regulations to repeal for every one that is proposed \u2013 is also fundamentally flawed. While it is true that some regulations are promulgated at the discretion of the agency<\/a>, these regulations are nonetheless tied to statutory directives and cannot be withdrawn willy nilly. Agencies must initiate a new notice and comment rulemaking for withdrawal of rules that themselves went through the notice and comment process, and they must provide a reasoned basis for the decision that is premised in the authorizing statute \u2013 not in some half-considered White House policy prescription. That was the Supreme Court\u2019s message in Massachusetts v. EPA, the case that set in motion EPA\u2019s GHG regulations. Decisions not to regulate cannot \u201crest[] on reasoning divorced from the statutory text.\u201d As a result, a reviewing court would likely find any withdrawal of a regulation that rests on the executive order\u2019s rationale to be an impermissible reading of the statute, or otherwise arbitrary and capricious.<\/p>\n

Some commenters have suggested that this is simply a political stunt, and that the practical effect of the order will likely be limited by the types of statutory directives and legal considerations noted above (this article is one example<\/a>). \u201cPay as you go\u201d and \u201cone in-two out\u201d do have a nice sound bite quality, and plainly pay to the anti-regulatory contingent. Moreover, the order does recognize that agencies can only follow its directive \u201cto the extent permitted by law.\u201d But it is nonetheless, at the very least, confusing, and will likely make it harder for agencies to do their jobs. \u00a0And while erecting hurdles in the executive branch may ultimately serve Trump\u2019s deregulatory agenda, it will neither serve the interests nor protect the health and well-being, of the American people.<\/p>\n","protected":false},"excerpt":{"rendered":"

Michael Burger and Jessica Wentz On Monday, President Trump issued an executive order directing all agencies to control regulatory costs by: (1) ensuring that the \u201cincremental costs\u201d of all new regulations that are finalized this year, including repealed regulations, are no greater than zero, and (2) identifying two regulations for potential repeal for every new […]<\/p>\n","protected":false},"author":1403,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[9485,9481],"tags":[],"class_list":{"0":"post-4643","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-deregulation","7":"category-executive-action","8":"czr-hentry"},"yoast_head":"\nTrump\u2019s Executive Order on Regulatory Costs is Not Only Arbitrary; 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