How U.S. Agencies Are Fudging the Numbers on Environmental Regulations

Like most math students, federal agencies have to show their work when solving a problem. Whether managing public lands or reining in pollution, they’re expected to back up major decisions with a breakdown of the pros and cons for society—and present how data guide every conclusion.

The Trump administration, however, has taken a different tack. Instead of following the numbers where they lead, experts say it’s manipulating the math in unprecedented ways to advance fossil fuel interests and harm human and wildlife health in the long term. “I think what this administration does is just a totally different beast,” says Richard Revesz, director of New York University’s Institute for Policy Integrity, a nonpartisan think tank. “The analysis they use is outside the bounds of professional judgment.”

This tinkering has led to some equally far-out conclusions. Last August the U.S. Department of the Interior concluded that a major oil drilling project could actually reduce global carbon emissions. The environmental report for the lease—potentially the first offshore fuel production in Alaska’s federal waters—reasoned that extracting up to 70,000 barrels of crude per day would keep foreign countries with laxer regulations from using some of their own reserves, a conclusion that critics say defies the economic logic of today’s energy markets by misrepresenting supply and demand. “That’s just a crazy, crazy analysis,” says Jeremy Lieb, an attorney for the environmental nonprofit Earthjustice. The government approved the project in October.

The federal government’s faulty bookkeeping also breaks with longstanding guidance that transcends party lines. For decades both Republican and Democratic administrations have instructed agencies to square the costs of new rules with an economic estimate of their benefits, even to the point of monetizing human lives. Traditionally, these estimates have encompassed all of a policy’s upsides, no matter how indirect. For example, when President Reagan’s Environmental Protection Agency (EPA) looked at the effects of tamping down lead in gasoline, it realized that tighter regulations would slash pollution like harmful ground-level ozone as well—a health “co-benefit” valued at $222 million a year. Added together, the savings helped move the agency to phase lead out of fuel.

But Trump officials, in several cases, are playing fast and loose with this calculus—at least when it suits their deregulatory agenda. “It’s clear that the administration shops for opportunities to either deflate or inflate benefits, or to incorporate or exclude co-benefits, entirely for the convenience of the results they want to reach,” says Joseph Goffman, executive director of Harvard University’s Environmental and Energy Law Program.

Take its effort to repeal the Clean Power Plan, the Obama administration’s signature climate policy. EPA officials ignored billions of dollars in health benefits from air pollution reductions that stem from carbon cuts. Similarly, in December, the agency said that 2012 rules to curb mercury emissions from power plants—which cause a wide range of health problems in people, birds, and aquatic animals—were no longer “appropriate and necessary.” It supported its opinion with calculations that whittled the previous estimate of $90 billion in societal benefits from mercury limits down to only $6 million.

“The consequences are enormous,” Revesz says. “You won’t find a single respectable economist who would say this was a plausible methodology.”

So far much of this fuzzy math has been done piecemeal. But last year the EPA announced that it wants to formally rewrite its cost-benefit balance sheets—a move that environmentalists and legal experts see as a way to minimize the upsides of all kinds of regulations. “If they institutionalize not counting co-benefits for environmental rules, the lasting impact of that could be huge,” says Janet McCabe, a law professor at Indiana University and, like Goffman, a former EPA official under President Obama.

In the end, many of the Trump administration’s decisions will likely be challenged in court. Environmental groups have already sued to stop the Arctic offshore drilling lease. On the flip side, Revesz says, coal companies might now sue to overturn the existing mercury caps, citing the EPA’s conclusion of unreasonable costs. Before any rules can be undone, though, the agency’s accounting will have to pass judicial muster. It’s like getting called up to the chalkboard in class—everyone can see if your numbers do or don’t add up.

Additional reporting by Lexi Krupp.

This story originally ran in the Spring 2019 issue as “Fudging the Numbers.” To receive our print magazine, become a member by making a donation today.