Major Regulations Research Articles

Unquantified Benefits and Bayesian Cost-Benefit Analysis

Regulatory agencies are required to perform cost-benefit analysis of major rules. However, in many cases regulators refuse to report a monetized value for the benefits of a rule that they issue. Sometimes, they report no monetized value; at other times, they report a monetized value but also state that not all benefits have been quantified. On occasion, regulators also refuse to monetize or fully monetize costs. These practices raise a puzzle. If a regulator chooses not to monetize all the benefits or all the costs, it is not doing cost-benefit analysis. If it is not doing cost-benefit analysis, what is it doing? To investigate this question, we compiled a data set consisting of all major regulations issued by agencies from 2010 to 2013. We come to three conclusions. First, there are countless examples where agencies fail to fully monetize the benefits and costs of regulations. Second, in most cases, agencies could easily monetize or partially monetize those benefits and costs. Third, even where monetization would be difficult, the agencies could and should have made explicit the implicit valuations they relied on and supported those valuations as much as possible with empirical evidence. We then proceed to explain how agencies could engage in cost-benefit analysis even when they do not have a reliable basis for estimating valuations. Even where they lack complete data, agency regulators may be able to make reasonable guesses about the harms or benefits from regulations. In many cases, these guesses will be based on the experience and latent knowledge of the agency staff. These preliminary guesses constitute Bayesian prior probabilities. While agencies should be permitted to “guess” — that is, supply a subjective prior probability — they must also be required to update their estimates as they gain new information.

On Objective Risk

Objectivity in the science of risk plays a monumental role in the projection of the benefits from health and safety regulations, which constitute the majority of total reported benefits of all federal regulations. Claims concerning the accuracy of regulatory risk assessments have been untestable so far in that they focus on whether a risk assessment over- or underestimates the risk of exposure to certain hazards; yet such claims imply that a true level of risk is known. This paper proposes moving the debate from the realm of the untestable to the realm of the testable through study of the process objectivity of the science of risk. Consistency in adhering to a process that is meant to produce objectivity should yield objective results. This paper consolidates the existing body of guidelines and recommendations on sound risk assessment practices produced by the federal government and by various scientific bodies. It proposes that, to test the process objectivity of the science of risk as applied by regulatory agencies, a third party chosen from outside the agencies conduct a systematic assessment of major regulatory risk assessments, according to consolidated principles. The proposed process is testable, is objective, and?if adhered to consistently?has the potential to shed light on the accuracy of the benefits calculus of major federal health and safety regulations.

Thermodynamic simulation for the investigation of marine Diesel engines

Emissions in the shipping industry are a major environmental concern and IMO regulations are increasingly stringent. Existing methods to assess marine exhaust gas emissions require large and specialised input data-sets. There is therefore a requirement for a methodology which can resolve the dilemma of estimating time-varying gas properties with sufficient accuracy to, for example, predict NOX emissions, whilst also being applicable across the variety of engine types and operational modes that prevail in the marine context, for which there is often sparse input data.In this paper, the influence upon thermal efficiency and the prediction of gas temperature time-histories of differing levels of sophistication in modelled gas properties and composition models is therefore evaluated, as is the effect of modelling engine losses. Using the results of this study, a coupled dynamic-thermodynamic engine simulation in the time-domain is developed, capable of modelling engine performance across the full range of operational conditions (speed and load), including part-load and transient conditions. The simulation is validated against the Otto cycle and through simulations of experimental engine data, the model is shown to successfully predict actual engine performance across a range of engine load conditions.

Revitalizing the Information Quality Act as a Procedural Cure for Unsound Regulatory Science: A Greenhouse Gas Rulemaking Case Study

This working paper explains in detail how the Information Quality Act and implementing guidelines from the Office of Management and Budget provide a procedural law mechanism to ensure the objectivity, quality, utility, integrity and reproducibility of highly influential scientific assessments developed by federal agencies and third parties, which agencies in turn “disseminate” as support for major agency regulations. OMB’s guidelines, which are binding on all federal agencies, inter alia impose rigorous, uniform, peer-review process standards that govern agency peer-reviewer selection and retention practices. The guidelines also govern agencies’ public disclosure obligations with respect to the data, computational and computer program inputs, assumptions, and applications that are incorporated into the assessments. In addition, OMB’s guidelines require federal agencies to provide adequate administrative review mechanisms to ensure that affected persons can seek correction of agency-disseminated HISAs that agencies failed to adequately validate. Given the highly technical and specialized nature and characteristics of HISAs and the data on which they are based, the IQA and OMB’s IQA guidelines anticipate that specialized review procedures separate and apart from ordinary APA notice-and-comment procedures, must be utilized under certain circumstances. The Environmental Protection Agency (“EPA”)’s 2009 Clean Air Act Section 202(a) Greenhouse Gas (“GHG”) Endangerment Findings and the decision-making process that led to the Findings, offer an ideal case study in how the IQA applies in the rulemaking context and how agencies can contravene the law. EPA’s review of climate-science assessments disseminated in support of the Endangerment Findings were subject to four distinct IQA legal obligations, none of which EPA satisfied. These obligations related to: EPA-developed and peer-reviewed HISAs; third-party-developed and peer-reviewed HISAs; EPA’s peer review of the Technical Support Document accompanying the Endangerment Findings that summarized and synthesized the numerous HISAs supporting them into a new HISA; and EPA’s improper treatment of IQA stakeholder requests for correction. EPA and the National Oceanic and Atmospheric Administration (“NOAA”) failed to ensure that the peer reviews of the HISAs satisfied the IQA’s most rigorous peer-reviewer independence, conflict-of-interest, and panel-balance standards. As the working paper explains, businesses and other stakeholders unsuccessfully sought correction of the faulty peer review processes employed to validate the scientific assessments supporting the Endangerment Findings, and reconsideration of the Findings themselves. Such final agency action potentially gives rise to legal challenges of EPA’s failure to comply with the IQA’s peer-review standards and its denial of specialized review of technical correction requests outside of the routine rulemaking process. A review of similar past legal actions filed by aggrieved regulatory stakeholders reflects that federal courts have been generally skeptical of IQA “private rights of action.” Those complaints foundered on plaintiffs’ standing to sue, as well as their assertion of a “positive” right to properly peer-reviewed government information. This working paper proposes an alternative approach to judicial enforcement of the IQA, one which addresses past lawsuits’ shortcomings. It explains this alternative approach in the context of a challenge to EPA’s and NOAA’s noncompliance with the IQA in its actions leading up to EPA’s GHG Endangerment Findings. The suit would seek to enjoin EPA’s use of all EPA, NOAA, and other agency-developed, improperly peer reviewed HISAs supporting the Findings, as well as the regulations they have spawned, until those HISAs have been peer reviewed once again in conformance with such IQA standards.

Money and Velocity During Financial Crisis: From the Great Depression to the Great Recession

This study models the velocity (V2) of broad money (M2) since 1929, covering swings in money [liquidity] demand from changes in uncertainty and risk premia spanning the two major financial crises of the last century: the Great Depression and Great Recession. V2 is notably affected by risk premia, financial innovation, and major banking regulations. Findings suggest that M2 provides guidance during crises and their unwinding, and that the Fed faces the challenge of not only preventing excess reserves from fueling a surge in M2, but also countering a fall in the demand for money as risk premia return to normal amid velocity shifts stemming from financial reform.

From Aberfan to the ‘Canvey Factor’: schools, children and industrial disasters

Children, and schools, are potent symbols of victimhood in industrial disasters. In the case of historical industrial disasters such as Aberfan and Flixborough, and in terms of preparation for future industrial disasters under Control of Major Accident Hazard regulations, communities are seen as passive responders to accidents. Moreover, following industrial accidents, communities are frequently accused of culpability or profiting from the disaster. There is hence a double pathologisation in play, with communities seen as comprising passive victims and manipulative survivors. Using an historical approach, the official accounts of the Aberfan and Flixborough industrial accidents are challenged with a focus on schools and children. Rather than being passive victims of these accidents, schools and children demonstrated agency in terms of their tacit knowledge, reporting potential accidents and recording their consequences. This provides a lens through which to interrogate current policy on industrial safety as it relates to schools and communities.

Beware the Rush to Presumption, Part C: A Public Choice Analysis of the Affordable Care Act's Interim Final Rules

Federal agencies issued eight major interim final regulations in 2010 to quickly implement major provisions of the Affordable Care Act. Our previous reviews found that the regulatory impact analyses for these regulations were seriously incomplete, often omitting significant benefits, costs, or regulatory alternatives. Analysis of equity was cursory at best. For these regulations, the quality and use of regulatory analysis fell well below the standards set by other federal agencies and even by HHS. This paper demonstrates that the low-quality analysis was a predictable result of the way that the administration and Congress chose to manage the regulatory process. Presidential and congressional decisions, in turn, reflected the political incentives both actors faced in 2010. This suggests that institutional rather than personal factors explain the poor quality of analysis and decisions that occur when agencies implement important presidential priorities in the face of tight legislative deadlines. To promote transparency and informed decision making, additional checks and balances in the regulatory process are needed to prevent politics from short-circuiting analysis.

Regulatory Process, Regulatory Reform, and the Quality of Regulatory Impact Analysis

Numerous regulatory reform proposals would require federal agencies to conduct more thorough analysis of proposed regulations or expand the resources and influence of the Office of Information and Regulatory Affairs (OIRA), which currently reviews executive branch regulations. We employ data on variation in current administrative procedures to assess the likely effects of proposed regulatory process reforms on the quality and use of regulatory impact analysis (RIA). Many specific types of activity by agencies and OIRA are correlated with higher-quality analysis and greater use of analysis in decisions, and the effects are relatively large. Our results suggest that greater use of Advance Notices of Proposed Rulemakings for major regulations, formal hearings for important rules, articulation of retrospective review plans at the time regulations are issued, and expansion of OIRA’s resources and role may improve the quality and use of RIAs.

A SOCIO-LEGAL APPROACH OF PROBATION IN LIGHT OF THE NEW PENAL CODE. RESTORATIVE JUSTICE VERSUS RETRIBUTIVE JUSTICE

Present article offers a theoretical analysis regarding probation services provided in Romania. In this respect are reminded the main forms of justice, as they exist around Europe, and then implemented and adapted to Romanian specific. Also there are underlined the major international regulations and laws related to the social-legal approach of probation. The most part of the article is dedicated to a deep analyse of the New Penal Code with regards especially to probation services. Also there mentioned the specifics and philosophy of each form of justice and there are given several examples of how them are implemented in the Romanian practice. New Penal Code along with probation laws and the enforcement of non-custodial sentences are part of a reform of probation in Romania that exceeded experimental phase as a significant institution whose role in the execution of non-custodial measures and the individualization of punishment, being at this stage legally contoured. Unguru, E., Sandu, A. (2014). A Socio-Legal Approach of Probation in Light of the New Penal Code. Restorative Justice Versus Retributive Justice. European Journal of Law and Public Administration, Year 2014, Issue 1, pp. 37-68. DOI: http://dx.doi.org/10.18662/eljpa.2014.0101.04

Long-term source apportionment of ambient fine particulate matter (PM2.5) in the Los Angeles Basin: A focus on emissions reduction from vehicular sources

Positive Matrix Factorization (PMF) was utilized to quantify sources of ambient PM2.5 in central Los Angeles (LA) and Rubidoux, using the Speciation Trends Network data, collected between 2002 and 2013. Vehicular emissions (including gasoline and diesel vehicles) were the second major contributor to PM2.5, following secondary aerosols, with about 20% contribution to total mass in both sites. Starting in 2007, several major federal, state, and local regulations on vehicular emissions were implemented. To assess the effect of these regulations, daily-resolved vehicular source contributions from 2002 to 2006 were pooled together and compared to the combination of 2008 to 2012 datasets. Compared to the 2002–2006 dataset, the median values of vehicular emissions in 2008–2012 statistically significantly decreased by 24 and 21% in LA and Rubidoux, respectively. These reductions were noted despite an overall increase or similarity in the median values of the daily flow of vehicles after 2007, at the sites.

Evapotranspiration measurement and crop coefficient estimation over a spring wheat Farmland ecosystem in the Loess Plateau.

Evapotranspiration (ET) is an important component of the surface energy balance and hydrological cycle. In this study, the eddy covariance technique was used to measure ET of the semi-arid farmland ecosystem in the Loess Plateau during 2010 growing season (April to September). The characteristics and environmental regulations of ET and crop coefficient (Kc) were investigated. The results showed that the diurnal variation of latent heat flux (LE) was similar to single-peak shape for each month, with the largest peak value of LE occurring in August (151.4 W m−2). The daily ET rate of the semi-arid farmland in the Loess Plateau also showed clear seasonal variation, with the maximum daily ET rate of 4.69 mm day−1. Cumulative ET during 2010 growing season was 252.4 mm, and lower than precipitation. Radiation was the main driver of farmland ET in the Loess Plateau, which explained 88% of the variances in daily ET (p<0.001). The farmland Kc values showed the obvious seasonal fluctuation, with the average of 0.46. The correlation analysis between daily Kc and its major environmental factors indicated that wind speed (Ws), relative humidity (RH), soil water content (SWC), and atmospheric vapor pressure deficit (VPD) were the major environmental regulations of daily Kc. The regression analysis results showed that Kc exponentially decreased with Ws increase, an exponentially increased with RH, SWC increase, and a linearly decreased with VPD increase. An experiential Kc model for the semi-arid farmland in the Loess Plateau, driven by Ws, RH, SWC and VPD, was developed, showing a good consistency between the simulated and the measured Kc values.

Evaluating Regulatory Reforms: Lessons for Future Reforms

Over the decades, regulatory reforms have sought to increase agency accountability and improve the quality of regulatory analysis and decision-making, with varying success. In this paper, I draw upon previous reform experiences to identify four criteria for effective reforms: independent oversight, veto power, broad applicability, and expertise. Thus, successful reforms charge an actor independent of the executive branch with overseeing agency rulemaking. They grant the independent actor sufficient veto power to enforce agency compliance. They apply independent oversight broadly to all major regulations and allow few exceptions. Finally, reforms appoint the independent actor that has the scientific and economic expertise to peer review agency analysis. Using these criteria, I evaluate the major reforms proposed in the 112th Congress to assess whether these reforms would limit agency discretion while improving the quality of regulatory analysis in the rulemaking process.

Incremental CH4 and N2O mitigation benefits consistent with the US Government's SC-CO2 estimates

Benefit–cost analysis can serve as an informative input into the policy-making process, but only to the degree it characterizes the major impacts of the regulation under consideration. Recently, the US, amongst other nations, has begun to use estimates of the social cost of CO2 (SC-CO2) to develop analyses that more fully capture the climate change impacts of GHG abatement. The SC-CO2 represents the aggregate willingness to pay to avoid the damages associated with an additional tonne of CO2 emissions. In comparison, the social costs of non-CO2 GHGs have received little attention from researchers and policy analysts, despite their non-negligible climate impact. This article addresses this issue by developing a set of social cost estimates for two highly prevalent non-CO2 GHGs, methane and nitrous oxide. By extending existing integrated assessment models, it is possible to develop a set of social cost estimates for these gases that are consistent with the SC-CO2 estimates currently in use by the US federal government.Policy relevanceWithin the benefit–cost analyses that inform the design of major regulations, all Federal agencies within the US Government (USG) use a set of agreed upon SC-CO2 estimates to value the impact of CO2 emissions changes. However, the value of changes in non-CO2 GHG emissions has not been included in USG policy analysis to date. This article addresses that omission by developing a set of social cost estimates for two highly prevalent non-CO2 GHGs, methane and nitrous oxide. These new estimates are designed to be compatible with the USG SC-CO2 estimates currently in use and may therefore be directly applied to value emissions changes for these non-CO2 gases within the benefit–cost analyses used to evaluate future policies.

How to consider engineered nanomaterials in major accident regulations?

Major accident regulations aim at protecting the population and the environment from possible accidental releases of chemicals. To achieve this goal, the regulations need to be reassessed in light of the development of new technologies. A currently rapidly growing new technology is nanotechnology, and engineered nanomaterials (ENM) are already produced and used in commercial products. The aim of this work was therefore to evaluate the current knowledge on human and ecotoxicology of ENM and their release and behavior in the environment in the context of major accident prevention. Nano-specific release paths are not to be expected. The established safety standards in the chemical industry are also applicable to ENM, especially the separate storage of flammable solvents and detention reservoirs. The potential of a release to the environment of ENM in powder form is larger than for suspensions; however, it can be minimized by safety measures established for conventional dusts. The considered human toxicology studies show that to date not conclusive enough answers regarding the toxicity of ENM can be made. The effects are dependent not only on the material itself but more on the functionalization, surface reactivity, size, and form. The acute ecotoxicity of ENM seems to be similar to the one of the corresponding microparticles (TiO2) or the respective dissolved ions (Ag, Zn) with the exception of photocatalytically active nano-TiO2, which has an increased toxicity. In order to guarantee that all ENM are included in the existing major accident regulations, different classification options are possible and the advantages and disadvantages are discussed. An important step will be the compulsory inclusion of nano-specific data in the Material Safety Data Sheets that serve as the basic medium to transfer information from the manufacturer to downstream users and authorities. We also call for a regular monitoring of the production and uses for ‘high production volume ENM’ that could have the largest implications for major accident regulations.

Did SOX Influence the Association between Fee Dependence and Auditors' Propensity to Issue Going-Concern Opinions?

SUMMARY:Li (2009) found that the association between fee dependence (FEEDEP) and the incidence of going-concern opinions (GCO) changed from insignificant in 2001 to positive in 2003. This finding has been interpreted as evidence that auditors became more conservative after the Sarbanes-Oxley Act (SOX). However, Feldmann and Read (2010) suggested that the year following SOX was not typical due to the intense spotlight directed at the audit profession. We revisit Li (2009) by extending the post-SOX period to 2011, and find robust results of little FEEDEP-GCO association in the years after 2003. Hence, the rise in auditor conservatism identified by Li (2009) likely represented the audit profession's temporary reaction to public scrutiny surrounding the passage of SOX, rather than a sustained movement toward more conservative going-concern reporting. Our study reinforces the notion that the effect of major events and government regulations cannot be adequately assessed based on what transpires in the short run.JEL Classifications: M420.

Establishing an integrated framework for security capability development in a supply chain

Securing supply chains have been thought as a critical issue for international supply chain management in recent years following the quality management. However, the supply chain security presently still focuses on a set of many individual measures rather than on a holistic approach. Therefore, to promote security capability effectively and systematically, an integrated framework must be established as guidance. This research would first make a comprehensive literature review, including both major international security regulations proposed by different organisations and academic literatures relevant to supply chain security management. Second, different organisations from different members across a supply chain are chosen for interviews to identify practices related to enhance security performance. Third, we summarise these findings and present the framework of security capability development (SCD). The analytic hierarchy process method is adopted to represent the hierarchical structure of SCD and the weights for dimensions, criteria, and alternatives are calculated.

Major Regulatory Changes and the Impact on Diagnostic Imaging in the United States 2005 to 2012∗: ∗Effective May 15, 2013

Federal regulation of diagnostic imaging in the United States has increased dramatically in recent years. The primary statutes aimed at curbing escalating costs and reorienting the national priorities of health care have a direct effect on the specialty of diagnostic imaging. This paper surveys the major regulations and current issues that pose challenges to the practice of diagnostic imaging in the United States, from the Deficit Reduction Act of 2005 through the American Taxpayer Relief Act of 2012.

Improving Regulatory Impact Analysis Through Process Reform: Testimony Before the U.S. Congress Joint Economic Committee

Scholarly research demonstrates that Regulatory Impact Analysis often falls short of the standards articulated in executive orders and Office of Management and Budget guidance. More often than not, agencies do not appear to use the Regulatory Impact Analysis to inform major decisions. Regulatory Impact Analyses often seem to be advocacy documents written to justify decisions that were already made, rather than information that helped regulators figure out what to do. Further improvement in the quality and use of Regulatory Impact Analysis will likely occur only as a result of legislative reform of the regulatory process. To achieve improvement, all agencies should be required to conduct thorough and objective Regulatory Impact Analysis for major regulations and to explain how the results of the analysis informed their decisions.

Sweden and Immigration: From Economic Migrants to Humanitarians

Swedish society has been recognized as the most pro-immigrant of any European country, coinciding with highly unrestrictive immigration policies (Nilsson, 2004). Sweden is referred to as an “immigration country” due to its large percentage of immigrants and its liberal, humanitarian-based policies (SCB Forecast, 2010). Immigration to Sweden is a post-war phenomenon that occurred in four distinct phases characterized by the country of origin. In analyzing the historical policies implemented by Sweden, the policies’ effect on Swedish society becomes evident alongside the reasoning behind the various implementations of major laws and regulations. This paper builds upon the existing historical overview of immigration to Sweden, focusing especially on the characteristics defining the 1970s in order to understand what circumstances caused a shift from discouraging economic migrants to promoting refugees and other asylum-seekers fleeing persecution. I continue my historical analysis by differentiating distinct immigration policies and analyzing their legal and practical implications and how these affects have benefitted Sweden; economically, politically, and/or socially. I hope to combine my analysis of historical waves of immigration to Sweden and related historical events with my analysis of Sweden’s policies surrounding immigration to answer, “How has an image of humanitarianism helped promote the political and social goals of Sweden?” My findings demonstrate how an economic plateau alongside global humanitarian needs pushed Sweden to prioritize its social and political goal of being a welfare state that values equality and benevolence. Furthermore, my analysis also focuses on the stricter asylum policies starting in the 1990s and how this has impacted immigrant life in Sweden today, including problems surrounding integration into society and discrimination.

Value-Based Interventional Pain Management: A Review of Medicare National and Local Coverage Determination Policies

Major policies, regulations, and practice patterns related to interventional pain management are dependent on Medicare policies which include national coverage policies – national coverage determinations (NCDs), and local coverage policies – local coverage determinations (LCDs). The NCDs are Medicare coverage policies issued by the Centers for Medicare and Medicaid Services (CMS). The process used by the CMS in deciding what is and what is not medically necessary is lengthy, involving a review of evidence-based literature on the subject, expert opinion, and public comments. In contrast, LCDs are rules and Medicare coverage that are issued by regional contractors and fiscal intermediaries when an NCD has not addressed the policy at issue. The evidence utilized in preparing LCDs includes the highest level of evidence which is based on published authoritative evidence derived from definitive randomized clinical trials or other definitive studies, and general acceptance by the medical community (standard of practice), as supported by sound medical evidence. In addition, the intervention must be safe and effective and appropriate including duration and frequency that is considered appropriate for the item or service in terms of whether it is furnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient’s condition or to improve the function. In addition, the safe and effective provision includes that service must be furnished in a setting appropriate to the patient’s medical needs and condition, ordered and furnished by qualified personnel, the service must meet, but does not exceed, the patient’s medical need, and be at least as beneficial as an existing and available medically appropriate alternative. The LCDs are prepared with literature review, state medical societies, and carrier advisory committees (CACs) of which interventional pain management is a member. The LCDs may be appealed by beneficiaries. The NCDs are prepared by the CMS following a request for a national coverage decision after an appropriate national coverage request along with a draft decision memorandum, and public comments. After the request, the staff review, external technology assessment, Medicare Evidence Development and Coverage Advisory Committee (MedCAC) assessment, public comments, a draft decision memorandum may be posted which will be followed by a final decision and implementation instructions. This decision may be appealed to the department appeals board, but may be difficult to reverse. This manuscript describes NCDs and LCDs and the process of development, their development, issues related to the development, and finally their relation to interventional pain management. Key words: Interventional pain management, interventional techniques, national coverage determinations (NCDs), local coverage determinations (LCDs), contractor medical director (CMD), Centers for Medicare and Medicaid Services (CMS), Department of Health and Human Services (HHS), guidelines, evidence-based medicine, evidence development with coverage