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    More Than 40 Prominent Economists Urge Supreme Court to Let EPA Consider Costs and Consequences of Clean Air Regulations

    07/21/2000

    More than 40 prominent economists filed a Friend of the Court brief with the Supreme Court today, asking the justices to overturn a lower court ruling that the Environmental Protection Agency (EPA) may not take into account the costs of regulations when setting standards under the Clean Air Act. Calling the lower court ruling "economically unsound," the economists argued that the EPA "should be allowed to consider explicitly the full consequences" of regulatory decisions, including costs, benefits, and any other relevant facts.
    In their Amici Curiae brief, the economists contended that the "plain aim" of the Clean Air Act "is protecting the public health." That aim, they said, "is unlikely to be achieved without, at least, an implicit balancing of benefits and costs."
    The Supreme Court filing was organized by the American Enterprise Institute-Brookings Joint Center for Regulatory Studies. The bipartisan group of economists signing the brief included three Noble laureates, seven former chairmen of the President's Council of Economic Advisers, and two former directors of the White House Office of Management and Budget. (A complete list of the economists signing the brief is attached to this
    release.)
    The case, American Trucking Association v. Carol M. Browner, Administrator of the Environmental Protection Agency, was appealed to the Supreme Court after a Federal Court in Washington D.C. ruled that the EPA was not permitted to consider costs in setting regulatory standards for enforcing the Clean Air Act.
    "We believe it would be imprudent for the EPA to ignore costs totally, particularly given their magnitude in this case," the economists stated in the brief. "The EPA estimates that those (clean air) standards could cost on the order of $50 billion annually."
    The brief argued, "Not considering costs makes it difficult to set a defensible standard, especially when there is no threshold below which health effects disappear."
    Ignoring costs, the economists said, "could lead to a decision to set the standard at zero pollution," which would threaten "the very economic prosperity on which public health primarily depends."
    The economists declared: "The importance of this issue cannot be overstated. Both direct benefits and costs of environmental, health, and safety regulations are substantial - estimated to be several hundred billion dollars annually."
    If the Supreme Court overturns the lower court ruling and allows the EPA to consider costs in establishing clean air regulations, the brief argued, it would be "a historic moment in the making of regulatory policy."
    -----
    For a copy of the brief go to:
    http://www.aei.brookings.org
    THE ECONOMISTS SIGNING THE BRIEF ARE:
    Kenneth J. Arrow
    Professor of Economics Emeritus, Stanford University
    Nobel Laureate in Economics
    --
    Elizabeth E. Bailey
    John C. Hower Professor of Public Policy, Wharton School, University of Pennsylvania
    Former Commissioner, Civil Aeronautics Board
    --
    William J. Baumol
    Professor of Economics Emeritus, Princeton University
    Director, C. V. Starr Center for Applied Economics, New York University
    --
    Jagdish Bhagwati
    Arthur Lehman Professor of Economics and Professor of Political Science, Columbia University
    Senior Fellow, Council on Foreign Relations
    --
    Michael J. Boskin
    T. M. Friedman Professor of Economics, Stanford University
    Former Chairman, President's Council of Economic Advisers
    --
    David F. Bradford
    Professor of Economics and Public Affairs, Princeton University
    Former Member, President's Council of Economic Advisers
    --
    Robert W. Crandall
    Senior Fellow, Brookings Institution
    Fellow, AEI-Brookings Joint Center for Regulatory Studies
    --
    Maureen L. Cropper
    Professor of Economics, University of Maryland
    Chair, EPA Advisory Council on Clean Air Compliance Analysis
    --
    Christopher C. DeMuth
    President, American Enterprise Institute
    Former Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget
    --
    George C. Eads
    Vice President, Charles River Associates
    Former Member, President's Council of Economic Advisers
    --
    Milton Friedman
    Senior Research Fellow, Hoover Institution, Stanford University
    Nobel Laureate in Economics
    --
    John D. Graham
    Professor of Public Policy and Decision Sciences, Harvard School of Public Health, Harvard University
    Director, Harvard Center for Risk Analysis
    --
    Wendy L. Gramm
    Director, Regulatory Studies Program, Mercatus Center, George Mason University
    Former Administrator, Office of Information and Regulatory Affairs, Office of Management and Budget
    --
    Robert W. Hahn
    Director, AEI-Brookings Joint Center for Regulatory Studies
    --
    Paul L. Joskow
    Professor of Economics, Massachusetts Institute of Technology
    Director, MIT Center for Energy and Environmental Policy Research
    --
    Alfred E. Kahn
    Robert Julius Thorne Professor of Political Economy Emeritus, Cornell University
    Former Chairman, Civil Aeronautics Board
    --
    Paul R. Krugman
    Professor of Economics, Princeton University
    --
    Lester B. Lave
    University Professor and Higgins Professor of Economics, Carnegie Mellon University
    Member, EPA Advisory Council on Clean Air Compliance Analysis
    --
    Robert E. Litan
    Vice President and Director, Economic Studies Program, Brookings Institution
    Codirector, AEI-Brookings Joint Center for Regulatory Studies
    --
    Randall W. Lutter
    Resident Scholar, American Enterprise Institute
    Fellow, AEI-Brookings Joint Center for Regulatory Studies
    --
    Paul W. MacAvoy
    Williams Brothers Professor of Management Studies, Yale School of Management, Yale University
    Former Member, President's Council of Economic Advisers
    --
    Paul W. McCracken
    Edmund Ezra Day Distinguished University Professor Emeritus of Business Administration, Economics, and Public Policy, University of Michigan, Ann Arbor
    Former Chairman, President's Council of Economic Advisers
    --
    James C. Miller III
    John M. Olin Distinguished Fellow, Citizens for a Sound Economy Foundation
    Former Director, Office of Management and Budget
    --
    William A. Niskanen
    Chairman, Cato Institute
    Former Member, President's Council of Economic Advisers
    --
    William D. Nordhaus
    Griswold Professor of Economics, Yale University
    Former Member, President's Council of Economic Advisers
    --
    Wallace E. Oates
    Professor of Economics, University of Maryland
    University Fellow, Resources for the Future
    --
    Peter Passell
    Senior Fellow, Milken Institute
    --
    Sam Peltzman
    Sears, Roebuck Professor of Economics and Financial Services, Graduate School of Business, University of Chicago
    Director, George J. Stigler Center for the Study of the Economy and the State, University of Chicago
    --
    Paul R. Portney
    President, Resources for the Future
    Former Chief Economist, President's Council on Environmental Quality
    --
    Alice M. Rivlin
    Senior Fellow, Brookings Institution
    Former Director, Office of Management and Budget
    --
    Milton Russell
    Professor of Economics Emeritus, University of Tennessee
    Former Assistant Administrator for Policy, Planning, and Evaluation, Environmental Protection Agency
    --
    Richard L. Schmalensee
    Dean, Alfred P. Sloan School of Management, Massachusetts Institute of Technology
    Former Member, President's Council of Economic Advisers
    --
    Charles L. Schultze
    Senior Fellow Emeritus, Brookings Institution
    Former Chairman, President's Council of Economic Advisers
    --
    V. Kerry Smith
    University Distinguished Professor, North Carolina State University
    Director, Center for Environmental and Resource Economics Policy, North Carolina State University
    --
    Robert M. Solow
    Professor Emeritus, Massachusetts Institute of Technology
    Nobel Laureate in Economics
    --
    Robert N. Stavins
    Albert Pratt Professor of Business and Government, John F. Kennedy School of Government, Harvard University
    Chairman, EPA Environmental Economics Advisory Committee
    --
    Joseph E. Stiglitz
    Professor of Economics, Stanford University
    Former Chairman, President's Council of Economic Advisers
    --
    Laura D'Andrea Tyson
    Dean, Haas School of Business, University of California, Berkeley
    Former Chair, President's Council of Economic Advisers
    --
    W. Kip Viscusi
    John F. Cogan, Jr., Professor of Law and Economics, Harvard Law School, Harvard University
    --
    Murray L. Weidenbaum
    Chairman, Center for the Study of American Business, Washington University, St. Louis
    Former Chairman, President's Council of Economic Advisers
    --
    Janet L. Yellen
    Eugene E. and Catherine M. Trefethen Professor of Business Administration and
    Professor of Economics, University of California, Berkeley
    Former Chair, President's Council of Economic Advisers
    --
    Richard J. Zeckhauser
    Frank P. Ramsey Professor of Political Economy, John F. Kennedy School of Government, Harvard University

    CONTACT:Robert W. Hahn, 202-862-5909, or Robert E. Litan, 202-797-6120, both
    of the AEI-Brookings Joint Center for Regulatory Studies AEI-Brookings
    Joint Center for Regulatory Studies, 202-862-5847

    on 7/21/00.