From MasterSource
Via Mark Krebs — April 13, 2023
“My strong first impression is that OMB Circular A-4 is particularly useful for advancing more quickly the administrative state’s ‘whole government’ agenda to counter the ‘current threat’. property’ of anthropogenic global warming.”
Last Friday April 7lame pants, Hill report:
The White House is [re]shaping the country’s regulatory system, announcing a new executive order and guidance that experts say could be used to justify increasingly stricter regulations. On Thursday, the White House issued an executive order reducing the number of regulations subject to more rigorous White House review and promoting public participation from underrepresented groups. here at the Office of Information and Regulatory Affairs.
The Hill article, “White House enacts regulatory reforms,” quoted two experts from organizations that typically support the climate alarm/forced energy transition aspect of the debate.
Billy Pusher, vice president of research and policy engagement at Resources for the Future… described the changes as a “sizable overhaul”.
“This is the most significant update to the U.S. government’s broad regulatory analysis policy since we implemented the regulatory analysis policy,” said Pusher. In particular, this could lead to both more regulatory and protective regulations.
And from James Goodwin, a senior policy analyst at the Center for Progressive Reform:
It brings a completely different way of thinking about management systems. It creates more space for the organs to make more adjustments and…to [make] more protective regulations.
“They laid the groundwork to make it a big deal. Do you ever play with Legos? You kind of spilled out the pieces. They removed the pieces. The question is: what are they going to build with it, if anything.”
The Judge WashingtonThe Daily on Energy (April 10) published: How changes in OMB regulatory analysis will advance Biden’s climate agenda. It cites another point of view:
Chad Whiteman, vice president for environmental and regulatory affairs at the American Chamber of Commerce, said the OMB proposal represents important changes that are effectively putting the thumbs up and “enhancing benefits” so that the administration can justify much more stringent regulatory requirements.
In short, there’s a lot of information to unpack about what OMB recommends and how it’s going. However, we are well aware of OMB Circular A-4 as it currently exists and have begun reviewing a new draft public review released on April 6.lame pants.
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Amended A-4 will be used for a variety of regulatory purposes (such as “reform” in the 2nd Amendment); It’s not just an effort to fast-track environmental regulations. However, these proposed changes are particularly applicable to advancing the Biden Administration’s energy/environmental policies. That said, my first strong impression is that OMB Circular A-4 is particularly useful for advancing more rapidly the administrative state’s “all-government” agenda to combat the “existential threat” of human-caused global warming. The proposal aims (among other things):
- Reduce the discount rate to increase the estimated lifecycle cost savings of new regulations.
- Jurisdiction to calculate the social cost of carbon (SCC) is estimated to occur outside the United States.
- Increase what constitutes a “key rule” (requires more transparent and thorough analytical oversight) from $100 million to $200 million per year for overall economic impacts.
Example: Indoor DOE
The U.S. Department of Energy has used some of these advantages in its ongoing equipment performance rule development. A case in point is the DOE regulation of consumer cooking products. The following table, excerpted from the DOE’s “Technical Support Document” (TSD), illustrates how the DOE inflates its cost-effectiveness justification by including SCC and vague health improvements. healthy for cooking products.
When the amount of energy saved is broken down per consumer, the dollar value seems insignificant; in the range of a dollar or two per year for a gas range. According to CEI’s Ben Liberman’s draft comment:
Average household energy use for initial cooking is low, below $35 per year for electric or gas cooking. Given the modest overall energy use from cooking, it’s not surprising that the estimated savings from the proposed rule are quite small at around $1.50 per year for a gas stove. In retrospect, the agency has previously refused to bother with efficiency standards for cooking products with good reason.
However, as shown in the tables above, the addition of SCC and the apparent health benefits increased the cost savings to much less significant values. The question is whether such methods can be proven to challenge the legislative intent of the Energy Policy Conservation Act (EPCA). Adding another official discount rate, possibly down to zero, further increases the claimed cost effectiveness. (Note that mainstream environmentalists have wanted zero discount rates for years.) Maybe they’ll get it from Uncle Joe eventually.
The (probably) good news is that there are opportunities for public input. It is not yet clear if an official log number has been assigned to this. Without that, public comments may not be as disclosed as traditionally through regulations.gov.
References to OMB Ordinances & Guidelines
Addendum: Mike Solon on Circular A-4
Mike Solon’s US Policy Strategy first impressions of Circular A-4:
OMB has proposed changes to “Circular A-4,” which provides guidance to agencies on how to perform regulatory analysis. They will be consulting the public but are likely to pass something very close to the proposal. Three major changes will scale towards active government:
- 1) Reduce the discount rate from 3% to 1.7% (current value based on their suggested formula). In the future, it will be easier to impose certain, large costs in order to achieve uncertain benefits in the distant future.
- Exaggerating the costs and benefits borne by lower-income populations and geographies, on the theory that with fewer resources they are disproportionately affected. Arguably this is the redistribution of wealth through regulation.
- Assuming those affected by regulation are risk-averse rather than risk-neutral, this sounds like extra recognition for making people feel better, even if they don’t. actually better off.
Under the executive order, Biden also changed the definition of “substantial regulatory action,” raising the threshold for more stringent consideration from “annual impact on the economy of $100 million,” to $200 million. dollars, adjusted for future GDP growth.
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