Aldy quoted on federal report showing EPA regulations produce more benefits than costs
Gina McCarthy’s nomination to head the Environmental Protection Agency was stalled late last week in the Senate's Environment and Public Works Committee, after a GOP boycott of a hearing.
But while McCarthy is expected to eventually win confirmation, the administration of President Barack Obama is fighting back. The latest annual review from the Office of Management and Budget shows the benefits of EPA rules far exceed their costs.
Joe Aldy, a former Obama White House staffer who now teaches at Harvard's Kennedy School, said the OMB review also revealed that the EPA has the largest share of both costs and benefits within the federal regulatory structure.
"They found that the estimated benefits are significantly larger than the estimated cost of the regulatory actions — both in the past year as well as over the past 10 years of the regulatory action," he said.
Specifically, he said, the federal government has between $50 and $115 billion in benefits from its regulations — with 60 to 80 percent coming from the EPA. The vast majority of benefits come in the form of reducing premature mortality, he explained.
On the cost side, the federal government spends about $15 to $20 billion, with roughly half attributable to the EPA.
"So they impose a cost on the economy but they're delivering, by about a factor of 10, additional benefits to the United States in terms of reducing air pollution and the associated mortality," Aldy explained.
