More Than Forty Prominent Economists Urge Supreme Court to Allow EPA to Consider Costs and Consequences of Clean Air Regulations

Abstract

More than forty prominent economists filed a Friend of the Court brief with the Supreme Court, asking the justices to overturn a lower court ruling that the Environmental Protection Agency (EPA) may not take into account the costs of regulations when setting standards under the Clean Air Act. Calling the lower court ruling "economically unsound," the economists argued that the EPA "should be allowed to consider explicitly the full consequences" of regulatory decisions, including costs, benefits, and any other relevant facts. In their Amici Curiae brief, the economists contended that the "plain aim" of the Clean Air Act "is protecting the public health&quo.t; That aim, they said, "is unlikely to be achieved without, at least, an implicit balancing of benefits and costs." The Supreme Court filing was organized by the American Enterprise Institute-Brookings Joint Center for Regulatory Studies. The bipartisan group of economists signing the brief included three Nobel laureates, seven former chairmen of the President's Council of Economic Advisers, and two former directors of the White House Office of Management and Budget. The case, American Trucking Association v. Carol M. Browner, Administrator of the Environmental Protection Agency , was appealed to the Supreme Court after a Federal Court in Washington D.C. ruled that the EPA was not permitted to consider costs in setting regulatory standards for enforcing the Clean Air Act. "We believe it would be imprudent for the EPA to ignore costs totally, particularly given their magnitude in this case," the economists stated in the brief. "The EPA estimates that those [clean air] standards could cost on the order of $50 billion annually." The brief argued, "Not considering costs makes it difficult to set a defensible standard, especially when there is no threshold below which health risks disappear." Ignoring costs, the economists said, "could lead to a decision to set the standard at zero pollution," which would threaten "the very economic prosperity on which public health primarily depends." The economists declared: "The importance of this issue cannot be overstated. Both direct benefits and costs of environmental, health, and safety regulations are substantial, estimated to be several hundred billion dollars annually." If the Supreme Court overturns the lower court ruling and allows the EPA to consider costs in establishing clear air regulations, the brief argued, it would be "a historic moment in the making of regulatory policy."Environment, Other Topics