Since 1981 all proposed environmental regulations which are likely to have a significant economic effect (generally more than $100 million dollars per year) must have a Regulatory Impact Analysis (RIA) or Economic Impact Analysis (EIA) conducted. The goal is to measure the costs and benefits of the regulation. An EIA generally includes a cost analysis while an RIA also includes a calculation of benefits. In this homework you will study the RIA conducted on an EPA regulation of your choosing. The EPA web site contains many RIA’s that vary enormously in their complexity. Your task is to find one that interests you and write a brief summary of the regulation and the estimated costs and benefits.
Make sure you find one that discusses both benefits and costs of the regulation.
- Finding a Regulatory Impact
The Environmental Protection Agency Web site (www.epa.gov) is an enormous source of information on pollution. You can start there and do a search on “regulatory impact analyses.”
For example, the website
contains a collection of RIAs for air pollution regulations. You will find that the EPA web site contains many broken links. If you come upon one, look elsewhere. It will be easiest if you choose a narrowly-defined regulation. For example, here is the EIA for the regulation of chemicals (including arsenic) in drinking water
- Summarize the RIA in a brief (maximum 2 page) paper. Most of the information you will need will be available in the executive summary at the beginning of the study. Include the following information in your report:
- A description of the regulation
- A summary of the benefits that are anticipated including the categories of benefits (health effects – deaths avoided, hospital visits avoided, effects on wildlife, etc) and the dollar magnitude of the benefits. Be clear about the units of reporting including how they have been deflated and whether these are measured as annual benefits or the PVB over a long time
- A summary of the costs of the regulation. Include the sources of the costs and the dollar
- Your overall evaluation of the RIA. Is it thorough and believable? Are there any obvious weaknesses or omissions? Does it compare cost and benefits using appropriate discounting methods?