The RFF Regulatory Performance Initiative: What Have We Learned?

Abstract

Retrospective analysis of federal environmental regulation aims to rigorously document the extent to which key policy objectives have been attained and at what cost. This paper reports the results of nine new case studies involving a total of 34 cost or benefit/effectiveness comparisons from a highly diverse set of environmentally oriented rules. Despite limitations of the case study approach and the non-representative nature of the sample, the results suggest somewhat of a tendency to overestimate both costs and benefits/effectiveness of regulation. Recommendations for revisions to future policy and analysis include: estimation of cost savings and distributional impacts from emissions trading, approaches to new technology development, use of up-to-date baseline information, analysis of prescriptive congressional mandates, federally mandated programs implemented by states, heterogeneity of costs and benefits, and treatment of uncertainty in energy prices and other macro factors. Recommendations also consider enhancements to the federal role in future retrospective analyses.