Criterion Affiliates Push for the Consideration of Benefits and Costs in the Clean Water Act's Implementation in a Supreme Court Amicus Brief

July 23, 2008

Criterion affiliates Robert Crandall, Robert Hahn, and Robert Litan are signatories of a Supreme Court amicus brief that advocates the sanctioning of cost-benefit analysis in the EPA’s implementation of §316(b) of the Clean Water Act. The issue is before the Supreme Court as a result of a difference among circuit courts over the legality of comparing the benefits and costs of policy options under the Clean Water Act.

The Second Circuit's ruling, by not allowing the consideration of important information about the relationships between the benefits and costs of alternatives, is economically unsound. In particular, signatories believe that, as a general principle, regulators cannot make rational decisions unless they are allowed to compare costs and benefits and to use the results, along with other factors as appropriate, to choose among alternatives.

To the extent permissible under the statute and case law, signatories argue that the EPA should be allowed to consider benefits and costs in establishing rules for implementing §316(b). The Court’s allowing EPA to consider benefits and costs would improve both the decision making process—by making it more transparent—and the regulatory decisions by allowing important relevant information to be considered explicitly.

Also joining the amicus brief were the following distinguished economists: Kenneth J. Arrow, William J. Baumol, Jagdish Bhagwati, Michael J. Boskin, Maureen L. Cropper, Michael Greenstone, R. Glenn Hubbard, Alfred E. Kahn, Lester B. Lave, Paul W. MacAvoy, James C. Miller III, Albert L. Nichols, William A. Niskanen, Roger G. Noll, Wallace E. Oates, Peter Passell, Sam Peltzman, Paul R. Portney, Harvey S. Rosen, Milton Russell, Thomas C. Schelling, Richard L. Schmalensee, Charles L. Schultze, V. Kerry Smith, Vernon L. Smith, Robert N. Stavins, W. Kip Viscusi, Murray L. Weidenbaum, Lawrence J. White, and Richard J. Zeckhauser.

To read the amicus brief in full, click here.