Costs and benefits of the regulation:
Since 1981 all proposed environmental regulations which are likely to have a significant economic effect (generally more than $100 million dollars per year) must have a Regulatory Impact Assessment (RIA) or Economic Impact Assessment (EIA) conducted. The goal is to measure the costs and benefits of the regulation. In this homework you will study the RIA/EIA conducted on an EPA regulation of your choosing. The EPA web site contains many RIA’s that vary enormously in their complexity. Your task is to find one that interests you and write a brief summary of the regulation and the estimated costs and benefits.
1. Finding a Regulatory Impact Assessment.
The Environmental Protection Agency Web site (www.epa.gov) is an enormous source of information on pollution. The website
https://yosemite1.epa.gov/ee/epa/eed.nsf/pages/RegulatoryImpactAnalyses.html
contains a collection of RIA/EIA’s for a number of regulations. Use the “Quick Links” box in the upper right corner and select “title (downloadable)” This will lead you to a number of studies that are on-line. You will find that the EPA web site contains many broken links. If you come upon one, look elsewhere. It will be easiest if you choose a narrowly-defined regulation. For example,here is the EIA for the recent regulation of arsenic in drinking water
https://yosemite.epa.gov/ee/epa/ria.nsf/vwAN/W200012A.pdf/$file/W200012A.pdf
and here is one to regulate the radon content of drinking water.
https://www.epa.gov/safewater/radon/hrrcafr.pdf
2. Summarize the RIA/EIA 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) A description of the regulation
B) 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 horizon.
C) A summary of the costs of the regulation. Include the sources of the costs and the dollar value.
D) 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?