Biden EPA Rescinds Trump’s Cost-Benefit and Guidance Document Rules

Troutman Pepper

Troutman Pepper

[co-author: Emily Guillaume]

Although the Biden administration has yet to issue many new substantive air quality regulations, Biden’s EPA recently issued two rules revoking Trump-era procedural regulations that should pave the way for a more aggressive regulatory agenda. On May 13, EPA rescinded the “Increasing Consistency and Transparency in Considering Benefits and Costs in the Clean Air Act Rulemaking Process Rule” (Cost-Benefit Rule), a requirement governing cost-benefit analyses for Clean Air Act (CAA) rulemakings, and on May 18, the agency revoked the “EPA Guidance; Administrative Procedures for Issuance and Public Petitions Rule” (Guidance Document Rule), which required all “significant” EPA guidance to undergo a public notice and comment process prior to issuance, modification, or withdrawal.

The Cost-Benefit Rule, finalized in December 2020, would have required a full cost-benefit analysis for a broad category of CAA regulations, including those that would have the largest annual impact on the economy; would “disproportionally affect” an industry, group, or area; or are “novel or relevant for other policy reasons.” The Guidance Document Rule, finalized in October 2020, imposed a public notice and comment requirement on guidance documents deemed “significant,” defined as those that were likely to have a substantial impact on the economy; create inconsistency within or among agencies; materially alter budgetary impacts of entitlements, grants, and other loan programs; or raise novel legal or policy issues. The Guidance Document Rule also required EPA to distinguish between “active” and “inactive” guidance via an official guidance portal. Documents that the agency determined to be in effect and “active” were to be posted on the portal, while those that should no longer be in effect were to be removed from the portal and deemed “inactive.”

The Trump EPA touted its procedural regulations governing CAA cost-benefit analyses and EPA guidance as supporting transparent, scientifically sound development of agency rules and guidance. Industry groups largely supported the rules as commonsense measures that would streamline compliance and improve decision-making. Environmental groups, however, opposed the rules out of concern that they stripped EPA of too much of its authority. Specifically, some claimed the Cost-Benefit Rule ignored the so-called “co-benefits” of rules, which are ancillary or indirect benefits that occur incidental to a rule’s primary target. They argued that it is necessary to consider co-benefits because they capture impacts of a rule that are beneficial, even if difficult to measure. Likewise, the Guidance Document Rule received backlash over concerns that EPA would no longer have the flexibility to publish timely guidance or notices to the public.

EPA Administrator Michael Regan positioned the twin recissions as in line with the Biden administration’s goal of protecting public health and the environment through rulemaking grounded in science, and acknowledged eliminating these procedural hurdles will allow EPA to more readily pursue its regulatory strategy.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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