My comments from today’s public testimony before EPA on its proposed cost-benefit overhaul. On a comical note, the enviro woman who testified before me criticized EPA for taking comments over the phone vs. by video… because phone testimony prevented EPA staff from seeing her tears and prevented her from seeing that EPA staff was being appropriately affected by her (stupid) testimony.
Good morning. My name is Steve Milloy. I publish JunkScience.com.
I commend EPA for trying to improve the travesty its cost-benefit analysis has become.
EPA has too often over the past 25 years justified huge and actual regulatory costs with entirely imaginary benefits.
Over the decades, corrupt EPA staff have figured out how to game cost-benefit analysis to justify ever more burdensome and pointless regulation.
The epitome of this corruption is EPA’s PM2.5 air quality regulation.
EPA staff has claimed that PM in outdoor air kills anywhere from 15,000 to as many as 560,000 people per year.
Then EPA staff places a dollar value on the lives allegedly saved by its regulations.
In 1996, for example, when EPA staff claimed its PM NAAQS would save 15,000 lives per year, the value of a saved life was $5 million.
By 2011, when EPA staff claimed its war-on-coal rules would save 38,000 lives per year, the value of a lost life jumped to almost $10 million.
When you started multiplying tens of thousands of lives saved with valuations in the millions of dollars, you get fantasy annual economic benefits on the order of tens of billions of dollars.
In this way, EPA had valued its war on coal rules as worth 2.5% of GDP. That was crazy.
In this way, the cost of every regulation no matter how outrageous is easily justified.
This is how the Obama EPA sold its war-on-coal rules to an unwary public.
There are two levels of fraud here.
First, anyone who has studied PM and is honest about what they have learned knows that PM kills no one.
So claims of lives saved by PM regulation are just pure fantasy.
Next, the value of an alleged life saved is also bogus.
The initial valuation of a life saved used by EPA in 1996 that is $5 million was conjured up by dishonest economists surveying people with this question:
“How much would you pay to reduce your risk of premature death by 1-in-100,000?”
Obviously, any answer to that question is entirely arbitrary and absurd.
To get to the $5 million valuation, EPA staff took the median response from a series of surveys, which was $50, and multiplied by 100,000.
That process has nothing to do with economics. It’s just a rationalization for getting a big benefit number. Economists call this form of fraud, “contingent evaluation.”
The two-step process that I’ve just described – inventing out of thin air a number of lives saved and then inventing out of thin air a monetary value for those fake lives saved is what has constituted flagship EPA cost-benefit analysis since 1996.
As you can see, the fundamental problem with EPA staff is one of honesty.
Honesty is a problem that plagues many political endeavors, which is largely what EPA has become.
I appreciate this rulemaking by the Trump EPA because it’s drawing attention and interest to the corrupt ways EPA has practiced cost-benefit analysis.
While this rulemaking can’t fix the dishonesty rampant among EPA staff. It can shine a light on it.
Thank you for that.