White House OMB should not be allowed to undermine EPA Clean Air Act regulation of greenhouse gases


Now that EPA is moving toward regulation of greenhouse gases under the Clean Air Act, any inclination of Office of Management and Budget regulatory czar-in-waiting Cass Sunstein to block strong regulation by applying the useless cost-benefit analysis paradigm to dealing with climate disruption must be curbed.  We told Environmental Science & Technology that President Obama’s naming of Sunstein to head the OMB Office of Information and Regulatory Affairs could be a problem unless OIRA is kept on a short leash in reviewing agency health, safety, and environmental rulemaking.

The Washington Post reported (“EPA Presses Obama To Regulate Warming Under Clean Air Act,” March 24, p. 1):

The Environmental Protection Agency’s new leadership, in a step toward confronting global warming, submitted a finding that will force the White House to decide whether to limit greenhouse gas emissions under the nearly 40-year-old Clean Air Act.

Under that law, EPA’s conclusion—that such emissions are pollutants that endanger the public’s health and welfare—could trigger a broad regulatory process affecting much of the U.S. economy as well as the nation’s future environmental trajectory. The agency’s finding, which was sent to the White House Office of Management and Budget without fanfare on Friday, also reversed one of the Bush administration’s landmark decisions on climate change, and it indicated anew that President Obama’s appointees will push to address the issue of warming despite the potential political costs.


President Obama has selected his former University of Chicago law school colleague Cass R. Sunstein to head the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA), which may continue to have a powerful say over the pace and content of government regulations in the new administration.  During the Bush years the net effect of OIRA’s activities was a sharp slowdown in regulatory activity, with those regulations that did emerge from the bureaucracy usually far weaker than the scientific evidence would justify.  Sunstein, who has written extensively on regulatory issues, is a firm proponent of using cost-benefit analysis when considering proposed regulations.

A recent article (“Outlook Hazy for Climate Regulations?”) in Environmental Science & Technology, a journal of the 160,000-member American Chemical Society, does a very good job of laying out some of the issues yet to be resolved (excerpts here, but read the full article, which is available online):

[Sunstein’s] academic writings have pushed some hot buttons for liberals and environmentalists. Sunstein has questioned some worker safety laws and advocated a very controversial senior death discount that calculates a lower economic value for the lives of the elderly compared with the young. Many climate control advocates are rattled by Sunstein’s push to give prominence to cost-benefit analyses when crafting new federal rules, which they say consistently tips the scales against environmental regulations by tallying greater costs than benefits.

Some environmental advocates say they are dismayed to see Obama select someone whom they expect to continue the approach of John Graham, OIRA chief under Bush. It was under Graham’s leadership that OIRA consolidated its power over regulatory decisions by requiring cost-benefit analyses. In 2001, Sunstein backed Graham’s nomination to head OIRA, which was under fire by Democrats in Congress. And Sunstein has written in favor of expanding both OIRA’s role in rulemaking and its use of cost-benefit analysis in the rulemaking process, suggesting that OIRA should be allowed to prompt regulation as well as constrain it.

The office, which is part of the White House Office of Management and Budget (OMB), is “powerful, and not well understood,” says Rick Piltz of Climate Science Watch, a program of the whistleblower protection group Government Accountability Project, which is aimed at defending government and corporate employees. Piltz believes that at times, OIRA can wield power over the agency employees who are charged by Congress with developing rules. “For economists at OIRA to overrule the expertise in agencies is problematic,” he says.

Environmental Science & Technology notes that Sunstein has been publicly at odds with EPA senior climate policy adviser Lisa Heinzerling, the lawyer who successfully led the petitioners’ case in Massachusetts v. EPA to a victory in the U.S. Supreme Court.  The Court’s ruling that carbon dioxide must be considered a pollutant under the terms of the Clean Air Act set in motion the process now underway toward regulation of greenhouse gases.  Heinzerling is co-author of an incisive book, Priceless: On Knowing the Price of Everything and the Value of Nothing, which lays out the case against the cost-benefit analysis approach to protecting health, safety, and the environment.

ES&T also notes that the global warming disinformation campaigners at CEI apparently like the choice of Sunstein:

Sunstein’s nomination has been hailed by some industry lobbyists and conservative organizations such as the Competitive Enterprise Institute, a nonprofit group that describes itself as advancing the principles of free enterprise and limited government. The American Chemistry Council, a chemical industry trade group, praises Sunstein’s work on how to improve regulations to make them more efficient and effective.

The role of the Office of Information and Regulatory Affairs is now under review, pursuant to a February 3 memorandum by the President ordering the new OMB Director to consider changes.  ES&T concludes:

The memo is seen by policy observers as paving the way to soften OMB’s broad powers, but it is not clear whether OIRA will gain or lose authority. Obama has already overturned two Bush-era executive orders that gave more regulatory control to OIRA and agency political appointees….

The watchdog group OMB Watch had been critical of Bush’s approach to OMB and issued a statement saying the group applauds President Barack Obama’s decision to undo one of former President George W. Bush’s attempts to paralyze the regulatory process.

“That was a good step,” Piltz agrees. “But the problem won’t go away if you have an OIRA director at odds with the rest of the White House and EPA on how you approach thinking about controlling greenhouse gases.”

The Center for Progressive Reform has published a valuable white paper raising concerns about Sunstein’s approach and presenting a strong critique of using cost-benefit analysis in developing environmental, health, and safety regulations (Reinvigorating Protection of Health, Safety, and the Environment: The Choices Facing Cass Sunstein, Center for Progressive Reform, White Paper #901, January 2009).

Also see the February 20 letter to OMB Director Peter Orszag from Rena Steinzor, President of the Center for Progressive Reform, which brings additional focus to the problem of determining OIRA’s proper role in regulatory review. 

Although Sunstein has not yet been formally nominated or confirmed, Bloomberg news service reported on March 17 that he is already working on agency business, quoting OMB spokesman Tom Gavin as saying Sunstein “is providing insight on key issues” to OMB Director Peter Orszag.


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