Evaluating the EPA's Clean Air Transport Rule

Harvard University professor and Analysis Group affiliate Robert Stavins coauthored a report with MIT Sloan School of Management professor Richard Schmalensee on the US Environmental Protection Agency's proposed Clean Air Transport Rule to regulate the interstate transport of sulfur dioxide (SO₂) and nitrogen oxides (NO_X) emitted from electric power generation facilities. In the report, "A Guide to Economic and Policy Analysis of EPA's Transport Rule" (March 2011), commissioned by the Exelon Corporation, the authors conducted a benefit-cost analysis to assess decisions about the stringency, design, and timing of the proposed rule. The authors found that, while imposing incremental costs to achieve reductions in SO₂ and NO_X emissions, the Transport Rule would produce significant benefits in terms of improved health outcomes, and better environmental amenities and services, which could significantly outweigh the costs.