New York University - Stern School of Business, Berkley Center for Entrepreneurial Studies; Leonard N. Stern School of Business - Department of Economics
Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Strategy and Business Economics
Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)
Date Written: July, 21 2008
Abstract
As economists, we believe that the Second Circuit's ruling, by not allowing the consideration of important information about the relationships between the benefits and costs of alternatives, is economically unsound. In particular, we believe that, as a general principle, regulators cannot make rational decisions unless they are allowed to compare costs and benefits and to use the results, along with other factors as appropriate, to choose among alternatives.
To the extent permissible under the statute and case law, EPA should be allowed to consider benefits and costs in establishing rules for implementing s316(b). The Court's allowing EPA to consider benefits and costs would improve both the decision making process - by making it more transparent - and the regulatory decisions by allowing important relevant information to be considered explicitly.
Arrow, Kenneth J. and Baumol, William J. and Bhagwati, Jagdish and Boskin, Michael J. and Crandall, Robert and Cropper, Maureen L. and Greenstone, Michael and Hahn, Robert W. and Harrison, David and Hubbard, Robert Glenn and Kahn, Alfred E. and Litan, Robert E. and MacAvoy, Paul W. and Miller, James C. and Nichols, Albert (Nick) L. and Niskanen, William A. and Noll, Roger G. and Oates, Wallace and Passell, Peter and Peltzman, Sam and Portney, Paul R. and Rosen, Harvey S. and Russell, Milton and Schelling, Thomas C. and Schmalensee, Richard and Schultze, Charles L. and Smith, V. Kerry and Smith, Vernon L. and Stavins, Robert N. and Viscusi, W. Kip and White, Lawrence J. and Zeckhauser, Richard J., Clean Water Act Brief (July, 21 2008). Reg-Markets Center Brief No. 08-03, Available at SSRN: https://ssrn.com/abstract=1165904
Political Economy - Development: Environment eJournal
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