WOTUS Repeal Proposal Contains Sloppy Cost Analysis: Economists

A sloppy estimate of the economic impact of repealing the Obama-era Waters of the U.S. (WOTUS) rule was used in the proposal the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers put forward to rescind the regulation, economists told Bloomberg BNA.The proposal relies on data and assumptions that industry previously criticized, according to economists and regulatory analysts. Chief among their complaints was the agencies used recession-era economic data and failed to account for some of the benefits of leaving WOTUS in place.Their economic analysis even drew criticism from David Sunding, a University of California-Berkeley agricultural economist who was hired by industry groups to counter the analysis the Obama administration used to back its regulation. "I am not normally this dismissive, but this is the worst regulatory analysis I have ever seen," Sunding told Bloomberg BNA in an interview. Sunding had previously criticized the Obama-era study for using "flawed" data, which he said resulted in understated costs and overstated benefits. The Trump administration's approach relies on much of the same data.The economic analysis projected that repealing WOTUS would be a net gain for the economy because the costs avoided through repeal would be greater than the benefits that would not be realized. The proposed repeal by EPA and the Corps is the beginning of a planned two-step process that also will see the agencies draw up a replacement.Regulatory scholars indicated that EPA's economic analysis is likely the result of the agencies’ wish to move to quickly repeal the regulation following a February executive order. EPA conducted the cost-benefit analysis because presidential executive orders and past guidance issued by the agency and the White House require an economic analysis for "significant regulatory actions," the agency told Bloomberg BNA. EPA also said it would conduct a subsequent cost-benefit analysis for its replacement regulation.