Economists: Trump Administration's Decision To Repeal Water Rule Based On Flawed Analysis

Economists are disputing President Donald Trump administration’s justification of rescinding a 2015 law that protects U.S. waters, saying it is based on flawed analysis.

The Water of the United States (WOTUS) rule was imposed by President Barack Obama to further protect bodies of water. The law broadened the authority of the Environmental Protection Agency and Army Corps of Engineers over U.S. waters -- more than what the agencies had under the Clean Water Act.

Trump and EPA Chief Scott Pruitt have been adamant about repealing the rule. In June, the administration submitted a proposal to rescind WOTUS, limiting the extent of the Clean Air Act. However, three economists said this week the Trump administration’s analysis inappropriately overlooked wetlands values. The economists’ findings come days before the Supreme Court holds a hearing that will decide on certain issues related to the rule.

Kevin Boyle of Virginia Tech, Matthew Kotchen of Yale University and Kerry Smith of Arizona State University published their assessment Thursday in the journal Science.

Between the 2017 analysis and a similar analysis made in 2015 under the Obama administration, the biggest difference is the treatment of wetland benefits as unquantified, Boyle told International Business Times. The economists said the differences between the two analyses led to about a 90 percent drop in quantified benefits from the 2015 to the 2017 analysis.

Boyle said the 2017 analysis shows an incomplete picture of the total WOTUS benefits. The EPA and Army Corps of Engineers had previously valued wetlands benefits at up to $500 million per year in 2015.

“The biggest surprise was the lack of credible evidence for treating the most substantial components of benefits as unquantified,” Boyle told IBT.

The relevant data seemed to have been ignored or “full and careful consideration of cost-benefit analysis best practices were not followed in assessing wetlands values and public attitudes about water-quality protection," Boyle said through a press release from Virginia Tech.

Besides excluding quantified benefits, economists also found the 2017 analysis deemed wetlands valuation studies were too old for inclusion, while pollution studies published in the same time frame were not considered too outdated to be included. The 2017 analysis also failed to include available data on public opinion regarding water-quality protections. That data supports the credibility of the wetlands benefits in the Obama-era analysis.

In a statement to IBT, an EPA spokesperson defended the 2017 analysis.

“The cost-benefit analysis for the Trump Administration’s WOTUS repeal was done in a way that respects the role that states play in protecting their waters,” the spokesperson said. “The previous Administration used a lot of worst-case assumptions in their cost-benefit analysis; we used data based on the current reality.”

The Trump administration’s analysis can lead to repercussions for the environment and public opinion, according to Boyle.

“It can undermine the opportunity to do a credible review of WOTUS," Boyle told IBT. "It undermines the credibility of past and future benefit-cost analyses. It can reduce the morale of government analysts who likely do not have the supporting resources to do a high caliber benefit-cost analysis.”

To dodge flawed reports, Boyle told IBT that future analyses should be done in an “enhanced collaboration between universities and government agencies to provide data and improved estimation procedures to provide credible support for public decision making.” Sufficient resources, like time, money and staff, should be provided to government agencies to conduct analysis required for major public decisions, he said.