Distributional Consequences and Regulatory Analysis

46 Pages Posted: 27 Sep 2021 Last revised: 22 Apr 2022

See all articles by Richard L. Revesz

Richard L. Revesz

New York University School of Law

Samantha Yi

New York University (NYU), School of Law

Date Written: September 20, 2021

Abstract

Distributional analysis has been a formal part of the regulatory state since 1993, when President Clinton directed agencies to consider the distributional consequences of significant regulations alongside the cost-benefit analysis of these regulations. President Obama reaffirmed and somewhat expanded this commitment. And both Presidents Clinton and Obama expressed particular concerns with distributional consequences in the environmental area, underscoring their respective commitments to environmental justice. Despite the undoubtedly good intentions embodied in these pronouncements, the analysis of the distributional consequences of regulation has never gotten off the ground. Unlike cost-benefit analysis, it has not become a meaningful part of the analysis of regulatory consequences.

In his first day in office, President Biden issued a Presidential Memorandum on Modernizing Regulatory Review, which calls on the Office of Management and Budget to propose procedures for analyzing the distributional consequences of regulations. This Article focuses on what it would take for the Biden effort to succeed where the Clinton and Obama efforts failed. In particular, agencies will need to be provided with clear guidance on the methodologies used to conduct distributional analysis. The lack of a standardized approach is part of the reason that the prior efforts were doomed. Moreover, agencies will need to take seriously the already existing requirement, so far honored only in the breach, of analyzing the distributional consequences of different regulatory alternatives. Otherwise, they will never be in a position to answer the key question in this area: when are the better distributional consequences of one alternative sufficient to overcome another alternative’s higher net benefits?

Keywords: Environmental law, environmental justice, administrative law, regulatory policy

JEL Classification: K2, K23, K3, K32

Suggested Citation

Revesz, Richard L. and Yi, Samantha, Distributional Consequences and Regulatory Analysis (September 20, 2021). 52 Environmental Law 53 (2022), NYU School of Law, Public Law Research Paper No. 21-44, Available at SSRN: https://ssrn.com/abstract=3927277

Richard L. Revesz (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States
212-998-6185 (Phone)
212-995-4590 (Fax)

Samantha Yi

New York University (NYU), School of Law ( email )

New York, NY
United States

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