US regulatory agencies have been encouraged to consider the equity and distributional impacts of regulations for decades. This paper examines the extent to which such analysis is done and provides recommendations for improving it. We analyze 189 regulatory impact analyses (RIAs) that monetize at least some benefits and costs prepared by a variety of agencies from October 2003 to January 2021. We find that only two RIAs calculated the net benefits of a policy for a specific demographic group. Furthermore, only 21% of RIAs calculate some benefits by group (typically for demographic groups) and only 20% calculate some costs by group (typically for industry groups such as small entities). Overall, the differences between presidential administrations are relatively small compared to the differences between agencies in their performance using our measures of distributional analysis. We then evaluate a sample of 23 analyses related to environmental justice (EJ) prepared by the Environmental Protection Agency (EPA) between January 2010 and January 2022. The EJ analyses frequently identify disproportionate exposures to pollutants for a variety of groups and discuss the effects of proposed regulations on these exposures, but they rarely consider the distribution of costs and less than half consider any alternatives. To date, virtually no agency prepares a distributional analysis that could help regulators evaluate whether a proposed regulation, on net, advantages or disadvantages a particular group and whether an alternative could generate a preferred distributional outcome.

The Biden Administration has signaled an interest in ensuring that regulations appropriately benefit vulnerable and disadvantaged communities. Prior presidential administrations since at least the Reagan Administration have focused on ensuring that regulations are efficient, maximizing the net benefits to society as a whole, without considering who benefits or who loses from these policies. Critics of this process of regulatory review have celebrated President Biden's initiative, hoping that distributional analysis and the pursuit of equity will displace traditional tools and interests such as cost-benefit analysis and the pursuit of efficiency. Meanwhile, supporters of the current process are concerned that pursuing equity will come at significant cost to efficiency and ultimately leave everyone worse off.This framework-efficiency versus equity-is misguided and counterproductive in many cases. As an initial matter, all regulations have distributional consequences, and the traditional arguments for ignoring these consequences are outdated or wrong. Understanding distributional effects and considering equity in regulation is long overdue.But current agency practice is often far from efficient, and there are opportunities to advance equity by improving the efficiency of regulations. In fact, neutral procedures such as cost-benefit analysis are more likely to benefit disadvantaged groups than is raw politics, whatever the intention, at least based on experience in regulatory policy. Furthermore, cost-benefit analysis and efficiency considerations more generally could help avoid outcomes that are, in their implementation, inequitable.This Article supports these arguments by drawing on examples from the environmental context, where considerations of equity and efficiency have often been thought to conflict. Importantly, it highlights how thinking about both equity and efficiency can help regulators identify ways to promote both using their existing authorities. And, in particular, it argues that funding and subsidy programs could be deployed in connection with regulatory actions to help realize equitable outcomes. This Article articulates some simple rules of thumb agencies could use to identify these contexts and thoughtfully deploy their resources, and it compares this approach to broader proposals to consider equity in regulation more generally.

Abstract The Biden administration has made equity a priority when issuing regulations, encouraging agencies to ensure that their regulations appropriately benefit and do not inappropriately burden disadvantaged groups. But scholarly examinations of agencies’ practices to date on understanding the distributional consequences of their regulations and on promoting equity have revealed significant gaps. In particular, agencies pay very little attention to the incidence of the costs of their regulations. The U.S. Environmental Protection Agency, for example, rarely considers the incidence of regulatory costs among disadvantaged groups, despite being an agency that conducts relatively complete benefit–cost analyses and explicitly analyzes environmental justice implications of its regulations. But this cost-blindness is a mistake; it presents a missed opportunity to use the current equity-focused momentum to make real improvements for disadvantaged groups that could have long-lasting effects. This essay calls for agencies to give more attention to the incidence of regulatory costs in order to identify needs and opportunities for grants and investments to disadvantaged groups. This approach could provide much-needed direction for a program like the Biden administration’s Justice40 initiative.

States can foster recycling of waste materials through a variety of policies. The majority of the states have recycling laws for waste products such as glass, plastic, cans, and paper. These laws vary in terms of stringency. The hierarchy we developed orders the laws as follows: laws that make recycling mandatory, laws that require the provision of recycling opportunities, laws that require the development of a recycling plan, and laws that specify a recycling goal. Based on national recycling data with over 400,000 observations, we find that the amount of recycling households undertake increases with the degree of stringency of the legal structure. Other legal recycling initiatives consist of laws that have established deposit policies, which a minority of states have done. Deposit policies establish financial incentives to promote recycling. States with deposit policies exhibit higher recycling rates for glass, plastic, and cans than states that have not enacted such laws. The higher recycling rates, for paper in the bottle deposit states, may reflect a broader impact of deposit policies on households’ recycling behavior for products not covered by the deposits.

There’s a longstanding consensus around the use of cost-benefit analysis (CBA) to inform federal agency risk-management decision making. Executive orders going back to President Reagan require agencies to conduct CBA, and agencies often exercise their statutory discretion to use CBA to help determine the appropriate stringency of regulations. Courts, too, increasingly appreciate that agency regulation requires at least some assessment of the expected costs and benefits, and they examine agency CBAs to ensure that agencies disclose and explain their scientific and policy choices. Congress’s role in this CBA consensus, however, has been understudied, minimized, and often misunderstood. This Article analyzes Congress’s record on CBA over time. The analysis reveals some important and sometimes counterintuitive trends. In contexts where competing tradeoffs are most salient, such as public health crises, the legislative record suggests that Congress values the neutral and expertise-forcing substantive constraint of CBA. Similarly, the record reveals that CBA’s substantive constraints are especially valuable to Congress for agencies controlled by the President. And it has often imposed CBA requirements for federal funding decisions, where agencies must make decisions on how to allocate scarce federal financial resources among competing projects. These findings have implications for the future of the CBA consensus, in which Congress might become a central player. The current CBA consensus is at risk from all fronts. Presidential support for CBA might evaporate, especially in light of the tool’s role in restraining the Trump Administration from implementing some of its preferred policies. In addition, more than half of the justices of the Supreme Court of the United States have signaled their willingness to reconsider the constitutional contours of the nondelegation doctrine, which could call into question the validity of the broad statutory language that currently supports some agency use of CBA. And an increasing number of scholars are questioning the legitimacy of searching judicial review of agency decision making. In the traditional narrative, Congress is at best ambivalent about agency CBA and might potentially reinforce its demise. The examination of the congressional record, however, reveals a more complicated relationship between Congress and CBA. In many cases, Congress appears to trade off some of its control in exchange for application of agency expertise revealed through CBA. The examination also helps explain why Congress has failed to pass statutes such as the Regulatory Accountability Act or has failed to extend CBA requirements to independent agencies. In light of Congress’s record to date, the Article proposes congressional actions that might be more successful in protecting the future of the CBA consensus.

States and the federal government typically share responsibility for environmental enforcement, with many states acquiring primary authority to enforce federal law. Under most federal environmental statutes, the U.S. Environmental Protection Agency (EPA) retains the right to “overfile,” or file its own enforcement action against a violator in addition to a state enforcement action. This article empirically tests the effect of EPA's ability to overfile on the state's enforcement strategy in the context of the Resource Conservation and Recovery Act (RCRA). In Harmon Industries v. Browner, 191 F.3d 894 (8th Cir., 1999 the Harmon decision), the Court of Appeals for the Eighth Circuit held that the EPA does not have the authority to overfile under RCRA. Other circuits, particularly the 10th Circuit, have disagreed with the Eighth Circuit's conclusion, holding that the EPA retains such authority, and the Supreme Court has never resolved this issue. This article predicts that states within the Eighth Circuit with preferences for lower environmental enforcement would impose more lenient penalties after the Harmon decision, and it tests this prediction using several proxies for state environmental enforcement preferences. I find that states in the Eighth Circuit with Republican governors were more likely to lower the final penalty amount from the proposed penalty amount after the Harmon decision. In other estimations, I also find that states in the Eighth Circuit with Republican governors collected less, on average, in final penalty amount per enforcement action after the Harmon decision. Other proxies for lower enforcement preferences, however, were not associated with consistent statistically significant effects. Because the governor arguably has the strongest influence on state enforcement policy, the results provide some support for the model's preference‐based predictions. Overall, the results suggest that the existence of a specific and relatively infrequent type of federal enforcement action—EPA's ability to overfile—could have a substantial effect on overall environmental enforcement through its ability to affect the enforcement efforts of certain states. These findings shed light on how federal enforcement efforts might matter in the context of cooperative federalism.

In the toxic tort context, both litigation and regulation require reliable scientific data to establish a causal connection between exposure to some substance and alleged harm before allowing recovery or mandating mitigation. On the one hand, it is important for litigation and regulation to be based on causal evidence of actual harms. Otherwise, these interventions could make society worse off by unduly limiting the availability of useful substances and diverting resources away from addressing true risks. On the other hand, for this system to comprehensively address all important environmental externalities, there must exist sufficient incentives to generate the data required for effective risk-management through litigation and regulation. This Article argues that, in many cases, the incentives are insufficient. When it comes to latent harms, in particular, scientific research evaluating causal links is challenging and expensive. Independent researchers, who require funding for their work, are unlikely to systematically analyze the effects of new substances. To date, there are thousands of unstudied substances in use. Given the increasing importance of reliable scientific data for efficient risk management, it is time to evaluate all options for incentivizing its production in order to promote optimal deterrence in the toxic tort context. This Article proposes several ways to combat the persistent data lag, including changes to tort common law and regulation. Most controversially, it proposes a new tort cause of action for informational monitoring and analysis in some circumstances when there exist no reliable studies on the potential harm of a particular substance. A successful claim would lead to the establishment of a scientific panel, paid for by the defendant, to analyze and monitor the link between exposure to the substance and subsequent health outcomes.

Cost-benefit analysis (“CBA”) is widely used in agency decisionmaking, summarizing the impacts of an agency’s chosen policy. As agency rulemakings have increased in quantity and importance, there has been renewed interest in improving transparency in decisionmaking, especially with respect to the models and data that underlie CBA. Recent proposals have been highly controversial. At least some of the controversy can be attributed to limited information about the usefulness of this type of transparency. This Article contributes to this debate by evaluating the current level of transparency in CBA and proposing incremental improvements. First, it suggests a new framework for thinking about transparency in CBA that includes two key dimensions: process transparency and policy transparency. A CBA that scores well on these two dimensions would allow interested parties to scrutinize agency action and hold decisionmakers more accountable. Second, it objectively evaluates the process transparency and policy transparency of a comprehensive set of CBAs for significant rules issued between October 2015 and September 2018. It uses a scorecard methodology, which scores whether a particular CBA met a number of different criteria related to transparency. The Article finds that many agency CBAs lack basic process transparency, meaning that their creation and role in the decisionmaking process is not clear. In addition, most CBAs continue to lack transparency about policy impacts, often failing to quantify and monetize costs and benefits. Among CBAs that do monetize at least some costs and benefits, most do not make their data, models, and underlying sources readily available online. In light of the results, the Article provides low-cost recommendations for improving transparency in CBA that could do more good than harm. In particular, while models used in the CBA and their inputs should be adequately described and made publicly available, it is premature to require that all underlying data from studies used in the CBA be made available. In line with this incremental approach to improving CBA transparency, we argue that the move toward adopting an “open policy framework” in government policy analysis should consider both the costs and the benefits carefully.

Cost-benefit analysis (“CBA”) has faced significant opposition during most of its tenure as an influential agency decisionmaking tool. As advancements have been made in CBA practice, especially in more complete monetization of relevant effects, CBA has been gaining acceptance as an essential part of reasoned agency decisionmaking. When carefully conducted, CBA promotes transparency and accountability, efficient and predictable policies, and targeted retrospective review. This Article highlights an underappreciated additional effect of extensive use of CBA to support agency rulemaking: reasonable regulatory stability. In particular, a regulation based on a high-quality CBA is more difficult to modify for at least two reasons. The first reason relates to judicial review. Courts take a “hard look” at agency findings of fact, which are summarized in a CBA, and they require justifications when an agency changes course in ways that contradict its previous factfinding. A prior CBA provides a powerful reference point; any updated CBA supporting a new course of action will naturally be compared against the prior CBA, and the agency will need to explain any changes in CBA inputs, assumptions, and methodology. The second reason relates to the nature of CBA. By focusing on the incremental costs and benefits of a proposed change, CBA can make it difficult for an agency to justify changing course, especially when stakeholders have already relied on the prior policy. Together, these forces constrain the range of changes that agencies could rationally support. CBA, thus, promotes regulatory stability around transparent and increasingly efficient policies. But, admittedly, this CBA-based stabilizing influence gives rise to several objections. This Article responds to, among others, concerns about democratic accountability and, most importantly, the use of alternative methods of policy modification. Overall, the Article concludes that CBA and judicial review of CBA play a desirable role in stabilizing regulatory policy across presidential administrations.

Debates about the desirability of widespread shale development have highlighted outstanding uncertainty about its health, safety, and environmental impacts—most prominently, its water-contamination risks—and the ability of current institutions to deal with these impacts. States, the primary regulators of oil and gas extraction, face pressure from the energy industry, local communities, and, in some cases, the federal government to strike the right balance between energy production and the health and safety of individuals and the environment—an elusive balance given the ongoing risk uncertainty. This dynamic is not especially unique to fracking, or even oil and gas extraction; instead, this dynamic, characterized by tradeoffs between environmental protection and economic development under risk uncertainty, is a common theme of environmental risk regulation. Regulators at every level of government weigh and evaluate potential interventions against this background. This Article contributes to a symposium held at Texas A&M School of Law that explores the advantages and disadvantages of various government interventions in the environmental context in an effort to identify ideal risk-management tools under various circumstances. It argues that the most important considerations for identifying risk-management tools in the environmental context are risks, incentives, and cost-benefit analysis. These cornerstone principles provide a useful framework for environmental policy in general, especially in situations that involve heterogeneous and uncertain risks. By paying attention to risk, incentives, and cost-benefit analysis, government regulators are more likely to promote optimal levels of environmental quality and avoid unintended, or even perverse, consequences. To demonstrate the usefulness of these concepts concretely, this Article applies them to the fracking context, focusing on the most prominent risks from widespread shale development, risks to water from shale gas extraction. It identifies risk-management gaps in tort litigation, insurance markets, and regulation schemes and suggests potential solutions.

Debates about the desirability of widespread shale development have highlighted outstanding uncertainty about its health, safety, and environmental impacts—most prominently, its water-contamination risks—and the ability of current institutions to deal with these impacts. States, the primary regulators of oil and gas extraction, face pressure from the energy industry, local communities, and, in some cases, the federal government to strike the right balance between energy production and the health and safety of individuals and the environment—an elusive balance given the ongoing risk uncertainty. This dynamic is not especially unique to fracking, or even oil and gas extraction; instead, this dynamic, characterized by tradeoffs between environmental protection and economic development under risk uncertainty, is a common theme of environmental risk regulation. Regulators at every level of government weigh and evaluate potential interventions against this background. This Article contributes to a symposium held at Texas A&M School of Law that explores the advantages and disadvantages of various government interventions in the environmental context in an effort to identify ideal risk-management tools under various circumstances. It argues that the most important considerations for identifying risk-management tools in the environmental context are risks, incentives, and cost-benefit analysis. These cornerstone principles provide a useful framework for environmental policy in general, especially in situations that involve heterogeneous and uncertain risks. By paying attention to risk, incentives, and cost-benefit analysis, government regulators are more likely to promote optimal levels of environmental quality and avoid unintended, or even perverse, consequences. To demonstrate the usefulness of these concepts concretely, this Article applies them to the fracking context, focusing on the most prominent risks from widespread shale development, risks to water from shale gas extraction. It identifies risk-management gaps in tort litigation, insurance markets, and regulation schemes and suggests potential solutions.

The profitability of extracting oil and gas trapped within the nation’s extensive shale formations has generated a boom in the oil-and-gas industry. Operators are pushing to drill close to populations and sensitive resources, and many states are facilitating such extensive drilling with laws that preempt local land-use control. On one hand, shale production has the potential to enrich local land owners who can collect lucrative royalty payments from operators. On the other hand, shale production is not without potential local risks. Some of these risks are speculative, and the magnitudes of the risks are uncertain.

Across the United States, local governments and states have adopted measures to restrict shale development that uses high-volume hydraulic fracturing and horizontal drilling (collectively, fracking) within their borders, hindering a national energy policy that relies on continued access to natural gas trapped within shale formations. This Article takes an empirical look at what might motivate these local anti-fracking measures by analyzing the behavior of New York towns from 2010 through the end of 2013. Before New York’s highest court recognized a town’s authority to ban fracking and before the state officially banned fracking, more than a hundred shale-rich New York towns adopted bans or moratoria on fracking. The results show that towns most likely to adopt bans were those with residents that were more vulnerable to potential water contamination and those with little history of prior oil-and-gas development. Moratoria adoption, in contrast, was largely associated with residents’ environmental preferences. The results suggest that, at least when deciding to ban fracking, towns weigh the local costs and benefits of the practice, relying on their knowledge of local conditions and vulnerabilities. The results, then, lay the groundwork for state and federal efforts to reduce local opposition by facilitating responsible shale development, with provisions for taking into account local knowledge and incentives for optimal activity levels, acceptable risk-taking, and comprehensive remediation.

Governments and private landowners have collected royalties on mineral resources for centuries. When more comprehensive measures to account for the externalities of mineral extraction are politically or practically unavailable, federal and state governments might consider adjusting the royalty rate as an expedient way to account for these externalities and benefit society. One key policy question that has not received attention, however, is whether a royalty rate can and should be manipulated in this way, notwithstanding statutory discretion. This Article fills that gap in the literature, evaluating the argument for increasing federal or state fossil fuel royalty rates through historical, theoretical, and practical lenses: by considering the meaning of royalties, the economic justifications for royalties, the legislative history of the implementation of federal royalties, and some of the considerations that private landowners have relied upon in setting royalties. It also compares mineral royalties to those used in the copyright context, revealing common threads with respect to underlying rationales and desired policy outcomes. It concludes that royalties have been used as pragmatic policy tools from almost their inception, and federal and state governments should exercise their existing statutory discretion to adjust mineral royalty rates to promote public welfare. In particular, it would be reasonable for governments to adjust mineral royalty rates to account for negative externalities that are not otherwise addressed by regulation or to pursue royalty rate reform to meet other policy goals.

This Article evaluates judicial review of agency benefit-cost analysis (BCA) by examining a substantial sample of thirty-eight judicial decisions on agency actions that implicate BCA. Essentially, the Administrative Procedure Act tasks federal courts with ensuring that federal agency action is reasonable. As more agencies use BCA to justify their rulemakings, the court's duty often requires judges to evaluate the reasonableness of agency BCAs. In this Article, we discuss the challenges that trigger judicial review of agency BCAs and the standards that govern the review. We then present specific examples of how courts analyze BCAs. Overall, we find many examples of courts promoting high-quality and transparent BCA. Courts have been willing to question BCA methodology and assumptions and request more transparency on these issues. As agencies rely more on BCA in their decision making, judicial review of BCA will be increasingly important. The stakes are high. Additional judicial oversight can be valuable — but bolstering any oversight effort to provide a policy check can also impose societal costs if desirable policies are delayed or left unimplemented. Ideally, efforts to foster greater judicial review should be structured so that the enhanced role of the judiciary itself passes a benefit-cost test. Armed with this Article's examination of the state of judicial review of BCA, scholars can more effectively evaluate the impact of judicial checkpoints on the use of BCA in agency decision making and assess whether shifting more regulatory oversight authority to the courts would be an effective approach to fostering more welfare-enhancing policies.

Economic theory predicts that individual recycling behavior gravitates toward extremes-either diligent recycling or no recycling at all.Using a nationally representative sample of 3,158 bottled water users, this article finds that this prediction is borne out for consumer recycling of plastic water bottles.Both water bottle deposits and recycling laws foster recycling through a discontinuous effect that converts reluctant recyclers into diligent recyclers.Within this context, a number of factors influencing recycling emerge.The warm glow from being both an environmentalist and an environmental group member is about equal to the monetary value of 5 cent bottle deposits.Respondents from states with stringent recycling laws and bottle deposits have greater recycling rates.Consistent with recycling being a threshold response, the efficacy of these policy interventions is greater for those who do not already recycle, have lower income, and do not consider themselves to be environmentalists.

Thirty-seven states have been involved in at least one of the lawsuits challenging the Environmental Protection Agency’s greenhouse gas regulations. By constructing a dataset of potential influences on state involvement, I empirically test states’ motivations to enter the litigation as either intervenors or parties. I find that the states' involvement is strongly associated with their political affiliations and somewhat associated with potential industry costs. Meanwhile, differences in climate change risks and public opinion do not drive the states' decisions. This Note argues that such state involvement in environmental litigation is undesirable and that the Environmental Protection Agency could stem such political actions by analyzing the costs and benefits of major environmental regulations by state. State-by-state analyses would highlight important distributional impacts among states, which would push Congress to alleviate those concerns through the political process. Meanwhile, such state-by-state analyses would also make overtly political decisions by state leaders more transparent; constituents could use the state-specific analyses to evaluate the positions of their leaders. Solving the tension caused by the differential impacts of climate change and climate change mitigation strategies in the United States could have helpful implications for international climate change treaties. Furthermore, this Note’s findings that the positions of state attorneys general are largely determined by politics in the environmental arena could suggest critical scrutiny of the motivations behind their positions in other litigation.