Feasibility Analysis and the Climate CrisisPDF Download
Agencies prepare feasibility analysis when proposing standards limiting greenhouse gas emissions and explicitly base their standard-setting decisions on what is feasible. They do this because the relevant statutes demand maximization of feasible emission reductions. Cost-benefit analysis (CBA) provides a supplement to the statutorily required analysis.
This Article argues that the President should limit CBA’s role in light of the urgency of the climate crisis, primarily to minimize delay and clear potential obstacles to effective climate policy. Specifically, the President should repeal the executive orders requiring CBA. While agencies would still have to prepare CBA for very expensive rules under the Unfunded Mandates Act, repeal of those orders would allow agencies to use CBA to inform Congress rather than influence agency standard setting.
This Article explains what feasibility analysis is and argues that the need to do all we are capable of doing to avoid, or at least ameliorate, the climate crisis justifies allowing feasibility analysis to displace CBA. Indeed, responsible governments respond to crises by doing all that is feasible to avoid or at least ameliorate them, not by asking whether every action needed to address a crisis generates quantified benefits exceeding the cost.
It suggests, however, that the executive branch reorient feasibility analysis to focus more on consumer welfare than on preserving existing firms in light of the need to transform the economy to deal with the climate crisis. The feasibility requirement demands that the goods and services firms provide remain available to consumers, albeit sometimes in altered form, but need not be interpreted to protect existing businesses.
This Symposium issue is made possible in part by our Platinum Symposium Sponsor Wilson Sonsini Goodrich & Rosati.