Economics in Environmental Decision-Making: US Environmental Protection Agency Provides for Site-Specific Cost-Benefit Analysis in Setting 316(b) Clean Water Standards

Tue May 27 16:24:00 EDT 2014
By Dr. David Harrison, Jr. with Dr. Noah Kaufman

On 19 May 2014, the US Environmental Protection Agency (EPA) finalized cooling water intake requirements for existing power plants and other industrial facilities under Section 316(b) of the Clean Water Act. These facilities often process millions of gallons of water per day, which leads to fish losses when fish and other aquatic organisms are trapped against intake screens ("impingement") or pulled into the cooling system ("entrainment"). These final 316(b) standards are the result of a process that has taken almost a decade and has included a major decision by the US Supreme Court allowing the use of cost-benefit analysis.

In this NERA paper, experts from NERA's Environmental Economics Practice applaud EPA's decision to include cost-benefit analysis as an important component of site-specific analyses for setting entrainment standards. Practice Co-Chair Dr. David Harrison, Jr. et. al. explain the methods that environmental economists -- working in conjunction with biologists and engineers -- have developed to provide reliable assessments of costs and benefits in individual 316(b) permit cases.