A Regulatory System for the Twenty-First Century Cass Sunstein, Administrator, Office of Information and Regulatory Affairs

http://www.whitehouse.gov/sites/default/files/omb/inforeg/speeches/a-regulatory-system-for-the-twenty-first_century-11-30-2011.pdf
As you may have noticed, the national debate over regulation has become unusually politicized and polarized.
In recent months, some people have stressed the crucial importance of regulatory safeguards – including rules that reduce deaths on the highways, prevent fraud and abuse, keep our air and water clean, and ensure that the food supply is safe.

Other people have objected to expensive regulations and burdensome mandates that impair growth, competitiveness, and innovation -- and that cost jobs.

In some contexts, both sides make exceedingly important points. The first sentence of the President’s January Executive Order explicitly recognizes those points, emphasizing the need to protect public health and welfare while also promoting growth and job creation.

But in some ways, the polar positions remain stuck in outmoded and decreasingly helpful debates from decades ago – from the 1970s and before.

In recent years, we have learned a lot about regulation. We know a lot more than we did during the New Deal period and the Great Society; we also know far more than we did in the 1980s and 1990s.

Here are eight of the most important things that we have learned:

• Cataloguing consequences. We have developed state-of-the-art techniques for anticipating, cataloguing, and monetizing the consequences of regulation, including both benefits and costs.
• Systemic effects. We know that risks are part of systems. We know that efforts to reduce a certain risk may increase other risks, perhaps even deadly ones, thus producing ancillary harms. At the same time, we know that efforts to reduce a certain risk may reduce other risks, perhaps even deadly ones, thus producing ancillary benefits.
• Flexibility. We know that flexible, choice-preserving approaches, respecting heterogeneity and the fact that one size may not fit all, are often desirable, both because they preserve liberty and because they cost less – sometimes a lot less.
• Small steps, large benefits. We are aware that large benefits can come from seemingly modest and small steps – including simplification of regulatory requirements, provision of information, and sensible default rules, such as automatic enrollment for retirement savings.
• Public participation. We know, more clearly than ever before, that it is important to allow public participation in the design of rules, because members of the public will have valuable and dispersed information about likely effects, existing problems, creative solutions, and possible unintended consequences.
• Disclosure. We know that if carefully designed, disclosure policies can promote informed choices and save both money and lives. Consider, for example, the recently redesigned fuel economy label, drawing attention to the concrete economic consequences of differences in miles per gallon, and the substitution of the clear Food Plate for the confusing Food Pyramid.
• Evidence, not anecdotes or intuitions. We know that intuitions and anecdotes, however compelling they may seem, and however suggestive that regulation is helpful or harmful, are both unreliable, and that advance testing of the effects of rules, as through pilot programs or randomized controlled experiments, can be highly illuminating.
• Continuing scrutiny. We know that it is important to explore the effects of regulation in the real-world, to learn whether they are having beneficial consequences or producing unintended harm. In short, we need careful assessments before rules are issued, and we need continuing scrutiny afterwards.

Of course it is true that people’s values differ, and in some cases, the relevant values will lead in a certain direction even if the evidence is clear. What I want to emphasize here is the opposite possibility, and the neglected one – that when the evidence is clear, it will often lead in a certain direction even when there are differences with respect to underlying values.

If, for example, a regulation would save a lot of lives and cost very little, people are likely to support it regardless of their party identification; and if a regulation would produce little benefit but impose big costs on real people, citizens are unlikely to favor it, regardless of whether they like elephants or donkeys. At least this is so if we engage on the facts.

To evaluate regulation, and its actual benefits and costs, we have to do that. Consider three facts:

1. In the first two years, the net benefits of rules issued in the Obama Administration have been over $35 billion – over three times the corresponding number in the first two years of the Clinton Administration, and over ten times the corresponding number in the first two years of the Bush Administration.
2. There has been no increase in rulemaking in this Administration. On the contrary, the number of significant rules reviewed by OIRA and issued in the first two years of the Obama administration is lower than the number issued in the last two years of the Bush administration – and indeed, the Obama Administration average is, through its first two years, lower than the Bush Administration average through its eight.
3. In the past decade, the costs of economically significant rules reviewed by the White House Office of Information and Regulatory Affairs (OIRA) were highest in 2007 and 2008, not 2009 and 2010. In its last two years, the administration of George W. Bush imposed far higher regulatory costs than did the Obama administration in its first two years.

On January 18th of this year, President Obama set out a fresh approach to federal regulation – an approach that reflects a lot of the new thinking about regulation. The very first paragraph of his executive order, a kind of mini-constitution for the twenty-first century regulatory state, emphasizes the importance of “economic growth, innovation, competitiveness, and job creation.” It states that our regulatory system “must promote predictability and reduce uncertainty.” It adds that our regulatory system “must measure, and seek to improve, the actual results of regulatory requirements.”

The new approach promises, at once, to maximize net benefits and to eliminate unnecessary regulatory burdens and costs on individuals, businesses both large and small, and state and local governments.

Among other things, the President called for an unprecedentedly public, and an unprecedentedly ambitious, government-wide “lookback” at federal regulation. The lookback requires all agencies to reexamine their significant rules, and to streamline, reduce, improve, or eliminate them on the basis of that examination.

Over two dozen departments and agencies have released final plans to remove what the President has called unjustified rules and “absurd and unnecessary paperwork requirements that waste time and money.” The plans span over 800 pages and offer more than 500 proposals.

In the coming years, billions of dollars in savings are anticipated from just a few initiatives from the Department of Transportation, the Department of Labor, HHS, and EPA. And all in all, the plan’s initiatives will save tens of millions of hours in annual paperwork burdens on individuals, businesses, and state and local governments.

Some of the plans list well over fifty reforms. Many of the proposals focus on small business. Indeed, a number of the initiatives are specifically designed to reduce burdens on small business and to enable them to do what they do best, which is to create jobs.

Many of the reforms will have a significant economic impact. Here are just a few examples:

• The Department of Health and Human Services recently announced proposed and final rules that are expected to eliminate over $1 billion in annual regulatory costs.
• The Occupational Safety and Health Administration has announced a final rule that will remove over 1.9 million annual hours of redundant reporting burdens on employers and save more than $40 million in annual costs.
• OSHA plans to finalize a proposed rule projected to result in an annualized $585 million in estimated savings for employers. This rule would harmonize U.S. hazard classifications and labels with those of a number of other nations by requiring the adoption of standardized terms.
• Since the 1970s, milk has been defined as an “oil” and subject to costly rules designed to prevent oil spills. In response to feedback from the agriculture community and the President’s directive, EPA recently concluded that the rules placed unjustifiable burdens on dairy farmers -- and exempted them. The exemption gives whole new meaning to the phrase “don’t cry over spilled milk.” And over the next decade, the exemption will save the milk and dairy industries, including small business in particular, as much as $1.4 billion.
• The Departments of Commerce and State are undertaking a series of steps to eliminate unnecessary barriers to exports, including duplicative and unnecessary regulatory requirements, thus reducing the cumulative burden and uncertainty faced by American companies and their trading partners. These steps will make it a lot easier for American companies to reach new markets, increasing our exports while creating jobs here at home.
• In line with proposals from the Jobs Council, the Department of State has indicated that it will revisit current visa requirements and consider how best to promote tourism, thus promoting growth and creating jobs.

Of course, we don’t only need to look back; we also need to look ahead about how we regulate in the future.
The January Executive Order provides a series of new directives to govern future rulemaking. Emphasizing the importance of predictability and certainty, those directives are consistent with, and informed by, what we have learned about regulation in recent years. And those directives have been explicitly informing our efforts since January. You may have noticed that several rules, including some in the area of labor, have been withdrawn or are being rethought with reference to the principles in the new Executive Order.

Let me emphasize five key points.

1. Public participation. The President made an unprecedented commitment to promoting public participation in the rulemaking process – with a central goal of ensuring that rules will be informed, and improved, by the dispersed knowledge of the public. Agencies are not merely required to provide the public with an opportunity to comment on their rules; they must also provide timely online access to relevant scientific and technical findings, thus allowing them to be scrutinized.
2. Advance consultation. The Order directs agencies to act, even in advance of rulemaking, to seek the views of those who are likely to be affected. This group explicitly includes “those who are likely to benefit from and those who are potentially subject to such rulemaking.” Among other things, this emphasis on early involvement is an effort to acquire relevant information and to avoid unintended harmful consequences.
3. Simplification and harmonization. The Order specifically directs agencies to take steps to harmonize, simplify, and coordinate rules. It emphasizes that some sectors and industries face redundant, inconsistent, or overlapping requirements. In order to reduce costs and to promote simplicity, it requires greater coordination. The order also explicitly connects the goal of harmonization with the interest in innovation, directing agencies to achieve regulatory goals in ways that promote that interest.
4. Quantification. The Order firmly stresses the importance of quantification. It directs agencies “to use the best available techniques to quantify anticipated present and future benefits as accurately as possible” – and to proceed only on the basis of a reasoned determination that the benefits justify the costs.
5. Flexibility. The Order directs agencies to identify and to consider flexible approaches that reduce burdens and maintain freedom of choice for the public. Such approaches may include, for example, public warnings, appropriate default rules, or provision of information “in a form that is clear and intelligible.” We know that simplification of existing requirements can often promote compliance and participation and that complexity can have serious unintended consequences. We also know that flexible performance objectives are often better than rigid design standards, because performance objectives allow the private sector to use its own creativity to identify the best means of achieving social goals. To promote flexibility, we have recently issued a call to all agencies to reduce reporting burdens on small business and to eliminate unjustified complexity. We have received dozens of important initiatives in response; they were made public in September.

...

Cass Sunstein
http://www.whitehouse.gov/sites/default/files/omb/inforeg/speeches/a-regulatory-system-for-the-twenty-first_century-11-30-2011.pdf
November 30, 2011

Environmental concerns prove to be only tiny piece of puzzle

http://www.smh.com.au/national/environmental-concerns-prove-to-be-only-tiny-piece-of-puzzle-20111208-1olg9.html
MEASURES of economic wellbeing are great at assessing the value of the land and minerals we own and mine, but poor at reflecting the other side of the coin: the cost of resource depletion and land degradation due to agriculture, mining and development.

They are worse still at capturing the cost of pollution - where it causes illness, it can actually push up the gross domestic product of the health sector - and the value people placed on loss of species and ecosystems.

On resource depletion, the Herald/Lateral Economics wellbeing index borrows a model from the Australian Bureau of Statistics, which estimates the cost of land degradation based on impact on land values and yield rates.

In 2009-10, this was equivalent to $406 million. But this alone does not tell the story. The index must also reflect the value of new mineral discoveries and the cost of the exploration. Once these are factored in, it reaches $1.05 billion. While this may sound large, it is small in relative terms - just 0.1 per cent of net national income.

''If you are looking at resource depletion it has a small impact on wellbeing, and if you are looking at it quarter-to-quarter you would hardly notice the change,'' the chief executive of Lateral Economics, Nicholas Gruen, says.

This is not a universally held view. Left-leaning think tank the Australia Institute placed much greater weight on the impact of environmental damage in a report released earlier this year.

Gruen says he expects some people will be surprised by the low cost of resource depletion. ''But when you think these things through, technology keeps improving and we keep finding new resources,'' he says.

''Even if you were starting to end up with fewer reserves, the other thing that happens is we get much better at mining and processing.''

He gives the example of the central Victorian goldfields - an asset that was written off after the 19th century but where resources companies have recently returned with some success.

On climate change, the index weighs the cost and likelihood of three scenarios - that the world does nothing to cut emissions and temperatures rise by more than 5 degrees, that the increase is between 2 degrees and 3 degrees, and that the Copenhagen Accord goal of limiting warming to 2 degrees is achieved.

Estimates of the cost of each scenario are taken from the Garnaut Review; the probability of each happening from a climate models review by the United Nations Environment Programand emissions data from the International Energy Agency.

On current evidence, Lateral Economics concludes there is a 5 per cent chance of the worst-case scenario, a 70 per cent chance of 2-3 degrees warming and 25 per cent chance of less than 2 degrees. The net present value last year of the future economic damage caused by climate change was estimated at $400 million.


On environmental and ecosystem health, the wellbeing index database includes the Yale Environmental Performance Index, which assesses agriculture, forestry, biodiversity and air pollution. But, in what is likely to be a controversial assessment, the results are given no dollar weighting. .

Gruen calls it ''the Spice Girls question'': when people are asked what they ''really, really want'' in financial terms, ecosystems do not rate well.

''People say they want a clean environment and they care about air pollution. They will rally around the Franklin Dam, but if you tell them something is endangered it is hard to see any evidence of the extent to which they are prepared to pay for that,'' he says.

Related:
Nation richer, older and a little bit wiser
WELLBEING has risen even more quickly than gross domestic product, thanks to the boom in Australia's commodity export prices and big improvements in the combined knowledge of its people, according to five years of historical data from the Herald/Lateral Economics Index of Australia's Wellbeing released today. Read more: http://www.smh.com.au/national/environmental-concerns-prove-to-be-only-tiny-piece-of-puzzle-20111208-1olg9.html#ixzz1gHtcytAj

Putting a figure on inequality adds to strength of statistical spotlight
New numbers are to the press as shiny bottle caps are to magpies. Statistics have the power to shape a debate or provide oxygen to an issue. From a major bank's survey of consumer confidence to a political party's targeted release of ''internal polling'', numbers are often used to bring publicity to a company or a cause. When even condom manufacturers use surveys to get publicity, you know what the new maxim must be: statistics sell.
Read more: http://www.smh.com.au/national/environmental-concerns-prove-to-be-only-tiny-piece-of-puzzle-20111208-1olg9.html#ixzz1gHu1ZfIH

When the Best Start in Life Turns Out to be an Early Start
HUMAN capital - the skills and know-how of our people - is the biggest positive contributor to wellbeing after net national income. The index measures it through a combination of indicators that track learning and innovation.
Read more: http://www.smh.com.au/national/environmental-concerns-prove-to-be-only-tiny-piece-of-puzzle-20111208-1olg9.html#ixzz1gHuTMK5R

Distribution of Money Makes a Big Difference
MONEY isn't everything - but it is a major driver of national and individual wellbeing.

Happy to live longer but mental illness and obesity still need to be dealt with 
IF LIFE expectancy at birth is any measure, Australians are some of the healthiest people on Earth.
Read more: http://www.smh.com.au/national/environmental-concerns-prove-to-be-only-tiny-piece-of-puzzle-20111208-1olg9.html#ixzz1gHvmPs7W

by Adam Morton
The Sydney Morning Herald http://www.smh.com.au
December 9, 2011

Regulation, Unemployment, and Cost-Benefit Analysis

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1920441
Abstract: Regulatory agencies take account of the potential unemployment effects of proposed regulations in an ad hoc, theoretically incorrect way. Current practice is to conduct feasibility analysis, under which the agency predicts the unemployment effects of a proposed regulation, and then declines to regulate (or weakens the proposed regulation) if the unemployment effects exceed an unarticulated threshold, that is, seem “too high.” Agencies do not reveal the threshold, do not explain why certain unemployment effects are excessive, and do not explain how they compare unemployment effects and the net benefits of the regulation. Many agencies also predict unemployment effects incorrectly. The proper approach is for agencies to incorporate unemployment effects into cost-benefit analysis by predicting the amount of unemployment that a regulation will cause and monetizing that amount. Recent economic studies suggest that monetized cost of unemployment is significant, possibly more than $100,000 per worker. If agencies used this figure, there could be significant consequences for a wide variety of regulations.
...
[A] paper, by Morgenstern, Pizer, and Shih (MPS), uses a structural model to estimate the effects of environmental regulation on employment across “four highly polluting, regulated industries”: pulp and paper,  plastics, petroleum refining, and steel.43 MPS find that spending on environmental protection actually creates jobs in the net, at a (statistically insignificant) rate of 1.55 new jobs per $1 million in cost increases.

EPA applied the MPS study directly to its boiler regulation. EPA estimated that the regulation would create approximately $2.4 billion in compliance costs.44 MPS measured costs in 1987 dollars, while EPA’s boiler regulation was priced in 2009 dollars, so EPA applied a .6 multiplier in order to discount the regulatory costs to their 1987 value. Accordingly, EPA concluded that its boiler regulation would create approximately 2,200 new jobs.
...
The most recent and comprehensive paper on what we will call “wage effects”—the lost earnings of workers who are laid off—is by von Wachter, Song, and Manchester (VSM). The authors focus on male, middle-aged workers who were stably employed in the late 1970s. The workers are divided into three groups: those who remained employed, those who lost their jobs in mass layoffs (where employment at a firm declined by at least 30 percent), and those who lost their jobs in non-mass layoffs....

The average worker earned approximately $50,000 (in year 2000 dollars) in 1979. Not surprisingly, the average wage declines dramatically for workers who are laid off. Those who lose their jobs suffer an immediate wage loss of up to 33 percent (that is, some are rehired and obtain comparable or lower wages, while others are not). What is surprising is that although these losses decline, they may remain as high as 21 to 27 percent twenty years after the job loss. VSM calculate that over 20 years the average loss for a worker in their dataset ranges from $110,000 to $140,000. This range must be considered a lower bound for the cost of unemployment for an individual worker because losses most likely persist beyond 20 years.

Other scholars have found similar results, although no other study we are aware of examines earnings losses over twenty years.108 Most studies go no farther than six years. The studies find first-year earnings losses from 17 to 66 percent, with most studies clustering around 30 to 40 percent. The six-year studies find  last-year earning losses ranging from 0 to 47 percent, with most around 10 to 20 percent.
...
These numbers are high, but it is possible that the actual harm is somewhat less. First, to the extent that workers lose rents (the portion of the wage that is above market), the loss is simply a transfer—those rents will be captured by consumers or shareholders—and not a social cost....
...
The full paper is available free of charge at : http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1920441  

by Jonathan Masur and Eric Posner both of University of Chicago Law School 
University of Chicago Law School http://www.law.uchicago.edu via SSRN Social Science Research Network www.SSRN.com 
Olin Working Paper No. 571, Public Law Working Paper No. 359; August 4, 2011

When cost-benefit analysis can show that financial investment is worthwhile

http://tiny.cc/absib
Cost-benefit analysis is becoming a popular topic among policy makers trying to make decisions about how to make investments in services at a time of tough economic situations. However, cost-benefit analysis is not yet widely used in the field of prevention.

Three speakers, at the 2011 annual conference of the Society for Prevention Research in Washington DC, presented work showing that cost-benefit analysis can be applied in different ways to assess efforts to improve outcomes for children. They described their work to assess the cost-benefit of individual programs, community-wide practices, and statewide policies.

The three projects aimed to prevent future problems for children and young people. They provide examples of how cost-benefit analysis can be done to help policy makers make smart investment decisions while improving outcomes for children.

Arthur Reynolds from the Institute of Child Development, University of Minnesota, looked at the cost-benefit of the Child-Parent Center, an early education program. He described a study that was unusual in that it followed 989 children from preschool up to 26 years of age. In addition, adult outcomes were directly measured using both administrative records and adult interviews. This allowed for direct measurement of cost-benefit, rather than estimates based on likely long-term outcome trajectories.

The Child-Parent Center education program was implemented widely in the Chicago area in actual settings. The program includes classroom, parent, health services, and community outreach components. It was offered as a pre-school program, a program for grades 1-3 (ages six to eight), and a kindergarten – grade 3 program.

The researchers found that the program had early effects on children’s standardized test scores. By the age of 24 to 26, they found further effects on earnings, education, reduced arrests, reduced child maltreatment, and reduced substance use.

These outcomes yielded economic returns, with most benefits stemming from reductions in crime and increases in earnings in adulthood. The cost-benefit ratio for the pre-school program was highest, at $10.83 for every $1 spent on the program. When looking at the benefits to the taxpayer alone, the ratio was $7.21 for every $1 spent. Estimates of the riskiness of the investment showed very low risk, with a 100 per cent likelihood of a net benefit for the pre-school program.

Margaret Kuklinski, from the Social Development Research Group, described a system of practice that can be implemented in communities. Communities That Care provides communities with guidance in evaluating the needs of local children, identifying evidence-based programs to target the specific needs prioritized in the community, and monitoring implementation and outcomes.

As Communities That Care allows communities to select their own evidence-based programs depending on need and priorities, this evaluation did not assess the cost-benefit of specific programs. Instead, it assessed the cost-benefit of a public health approach for implementing evidence-based programs on a large scale.

This evaluation spanned 24 towns in 7 US states. Those towns were randomly assigned to Communities That Care or usual services. The students who were followed from age 10 to age 13 showed significantly lower rates of starting smoking and delinquency if they were in a Communities That Care town, compared to those who were not.

The researchers looked at whether that impact was worth the investment from a financial point of view by considering evidence for the long-term impacts of delaying smoking and delinquency in children. After subtracting the costs to deliver Communities that Care, the authors found that for every $1 spent on the approach, $5.30 is saved on average. The savings are likely to be higher in larger towns and cities, as it was found to be much more expensive to implement the approach in small towns. These savings came from estimates of higher earnings, lower medical costs, and reduced crime.

Steve Aos, from the Washington State Institute for Public Policy presented the latest version of the institute’s cost-benefit model, which is used to perform cost-benefit analyses to advise policy makers directly in their investment decisions.

The model has a three-step approach to producing benefit-cost estimates. It estimates effect sizes of programs and policies using meta-analysis of high-quality studies, reducing effect estimates if the original findings are unlikely to be replicated exactly in actual situations.

Those effect sizes are then converted into money. This involves determining the running costs to implement the program or policy. The benefits are then calculated by estimating the impact of the program or policy effects on outcomes such as crime, education, health care use, and so on. The changes in these outcomes can be converted into money saved for taxpayers, program participants, and others in society. The risk of investment options is estimated using a procedure called Monte Carlo simulation.

Investment portfolios can also be created for policy makers so that they can determine the benefits of investing in a range of programs and policies to achieve particular policy goals. These portfolios are important because they allow policy makers to spread out the risk of investment, rather than “putting all of their eggs in one basket”.

Steve Aos presented some preliminary results from his model, using two programs as examples. The final results will be available in a report published by the WSIPP at the end of June.

Together, these three presentations showed different approaches to estimating the cost-benefit of intervening with children to promote better outcomes in the long term. They indicated that this can be achieved through primary research as well as detailed analysis of previous studies. This type of work will most likely be in greater demand as national and local governments strive to invest wisely in programs, practices, and policies that will have positive impacts on society.

References
J. David Hawkins, Sabrina Oesterle, Eric C. Brown, Michael W. Arthur, Robert D. Abbott, Abigail A. Fagan, and Richard F. Catalano. Results of a type 2 translational research trial to prevent adolescent drug use and delinquency: a test of Communities That Care. Archives of Pediatrics and Adolescent Medicine 163 (2009): 789-98.
Arthur J. Reynolds, Judy A. Temple, Barry A.B. White, Suh-Ruu Ou, and Dylan L. Robertson. Age 26 Cost–Benefit Analysis of the Child-Parent Center Early Education Program. Child Development 82 (2011): 379-404.

Prevention Action www.preventionaction.orgSPR 2011; June 8, 2011

Vera Launches Cost-Benefit Knowledge Bank for Criminal Justice Website

http://www.vera.org/news/vera-launches-cost-benefit-knowledge-bank-criminal-justice-website
The Vera Institute of Justice today launched cbkb.org, the project website of the Cost-Benefit Knowledge Bank for Criminal Justice (CBKB) at www.CBKB.org. The knowledge bank, funded by the Bureau of Justice Assistance and produced by Vera’s Cost-Benefit Analysis Unit, helps jurisdictions learn about using cost-benefit analysis methods and applications to better evaluate the economic impact of criminal justice policy choices.

“Federal, state, and local governments spend an estimated $214 billion on police, courts, and corrections each year; few have a sense of the return on investment from this spending,” said Tina Chiu, Vera’s director of technical assistance, who heads the cost-benefit analysis unit. “Cbkb.org aims to fill this knowledge gap.”

The website provides resources for practitioners and policymakers, including:

* simple but powerful technologies to deliver education and training to a variety of audiences in a cost-effective and convenient manner
* a reference database of hundreds of cost-benefit studies, containing information for states and counties looking to measure the return on their criminal justice expenditures
* content reflecting a growing demand for cost-benefit analysis tools: more than 600 participants across 45 states and as far away as the Northern Mariana islands have already participated in live cost-benefit webinars

Vera Institute of Justice www.Vera.org
Press Release dated April 5/8, 2011

A 21st Century Regulatory System

http://www.whitehouse.gov/blog/2011/05/26/21st-century-regulatory-system
On May 26, 2011 Kori Schulman wrote the following on the White House Blog:

Earlier this year President Obama outlined his regulatory strategy – one that protects public health and welfare while promoting economic growth, innovation, competitiveness, and job creation. As a key part of that plan, the President called for an unprecedented government-wide review of rules already on the books to identify which ones need to be changed or removed because they're out-of-date, unnecessary, or just don't make sense.

Today, the results of that review are in. More than two dozen Agencies have identified initiatives with the potential to eliminate tens of millions of hours in reporting burdens, and billions of dollars in regulatory costs, and this is just the beginning. Cass Sunstein, Administrator of the Office of Information and Regulatory Affairs, wrote in the Wall Street Journal today:

The initial review announced today is just the start of an ongoing process. Our goal is to change the regulatory culture of Washington by constantly asking what's working and what isn't. To achieve that goal, we need to obtain real-world evidence and data. We also need to draw on the experience and wisdom of the American people—which is why the president has put an emphasis on asking the public for their comments, ideas and suggestions. And so, before today's plans are finalized, the public will weigh in.

Now's your chance to weigh in. Visit www.whitehouse.gov/regulatoryreform to read the agency plans and share your comments, feedback and questions.

Here are a few highlights from the agency plans (read them all here):

* The Occupational Safety and Health Administration (OSHA) is announcing a final rule that will remove over 1.9 million annual hours of redundant reporting burdens on employers and save more than $40 million in annual costs. Businesses will no longer be saddled with the obligation to fill out unnecessary government forms, meaning that their employees will have more time to be productive and do their real work.
* EPA will propose to eliminate the redundant obligation for many states to require air pollution vapor recovery systems at local gas stations because modern vehicles already have effective air pollution control technologies. The anticipated annual savings are about $67 million.
* The Departments of Commerce and State are undertaking a series of steps to eliminate unnecessary barriers to exports, including duplicative and unnecessary regulatory requirements, thus reducing the cumulative burden and uncertainty faced by American companies and their trading partners. These steps will make it a lot easier for American companies to reach new markets, increasing our exports while creating jobs here at home.



Want to learn more about the ways the Obama Administration is changing the culture in Washington? Sign up for email updates on 21st Century Government.

Ed. Note: Cass Sunstein, Administrator of the Office of Information and Regulatory Affairs, has an op-ed in today's Wall Street Journal on 21st-Century Regulation and the ways federal agencies are eliminating unnecessary rules to save businesses money. Read it here.

Download Video: mp4 (12.9MB)
White House Blog www.WhiteHouse.gov/blog
Posted by Kori Schulman on May 26, 2011

OECD Launches Your Better Life Index

http://www.oecd.org/document/63/0,3746,en_2649_201185_47912639_1_1_1_1,00.html
On May 24, 2011 The Organization for Economic Cooperation and Development (OECD) www.OECD.org unveiled a new, interactive index that will let people measure and compare their lives in a way that goes beyond traditional GDP numbers.

Called the Your Better Life Index, the tool is part of a larger OECD Better Life Initiative that aims to measure well-being and progress. The index allows citizens to compare lives across 34 countries, based on 11 dimensions -- housing, income, jobs, community, education, environment, governance, health, life satisfaction, safety, work-life balance -- giving their own weight to each of the dimensions.
...
The OECD Compendium of Well-Being Indicators represents one of the first attempts to respond to the demand for comparative information on the conditions of people.s lives in developed market economies. Previous contributions in this field have focused on the conditions of poorer countries and on a more narrow range of dimensions (e.g. Human Development Index). This Compendium extends these efforts on both fronts.

It is a preview of the type of measures that will be included in the "How's life?" report to be released in October 2011.

The OECD plans to issue similar reports in the future on a recurrent basis, and to enrich the set of dimensions and indicators in the light of experience gained and of progress made in implementing better measures.

For more information:
Your Better Life Index - http://www.oecd.org/betterlifeindex
Video - www.youtube.com/watch?v=OOIK9YxQ2sY
Examples of country specific information from Your Better Life Index -
OECD Better Life Initiative
Compendium of OECD well-being indicators

Organization for Economic Cooperation and Development (OECD) www.OECD.org
Press Releases dated May 24, 2011 and May 18, 2011

75% of world's coral reefs under threat, new analysis finds - United Nations Environment Programme (UNEP) - 'Reefs at Risk Revisited' report presents

http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=659&ArticleID=6914

An analysis released February 23, 2011 finds that 75 percent of the world's coral reefs are currently threatened by local and global pressures. For the first time, the analysis includes threats from climate change, including warming seas and rising ocean acidification. The report shows that local pressures - such as overfishing, coastal development and pollution - pose the most immediate and direct risks, threatening more than 60 percent of coral reefs today.

'Reefs at Risk Revisited,' the most detailed assessment of threats to coral reefs ever undertaken, is being released by the World Resources Institute, along with the Nature Conservancy, the WorldFish Center, the International Coral Reef Action Network, Global Coral Reef Monitoring Network, and the UNEP-World Conservation Monitoring Center, along with a network of more than 25 organizations. Launches also took place in Australia, Caribbean, Indonesia, Malaysia, the United Kingdom, the United States and other locations around the world.

'This report serves as a wake-up call for policy-makers, business leaders, ocean managers, and others about the urgent need for greater protection for coral reefs,' said Dr. Jane Lubchenco, Under Secretary of Commerce for Oceans and Atmosphere and NOAA Administrator. 'As the report makes clear, local and global threats, including climate change, are already having significant impacts on coral reefs, putting the future of these beautiful and valuable ecosystems at risk.'

Local pressures - especially overfishing and destructive fishing - are causing many reefs to be degraded. Global pressures are leading to coral bleaching from rising sea temperatures and increasing ocean acidification from carbon dioxide pollution. According to the new analysis, if left unchecked, more than 90 percent of reefs will be threatened by 2030 and nearly all reefs will be at risk by 2050.

'Coral reefs are valuable resources for millions of people worldwide. Despite the dire situation for many reefs, there is reason for hope,' said Lauretta Burke, senior associate at the World Resources Institute (WRI) and a lead author of the report. 'Reefs are resilient, and by reducing the local pressures we can buy time as we find global solutions to preserve reefs for future generations.'

The report includes multiple recommendations to better protect and manage reefs, including through marine protected areas. The analysis shows that more than one-quarter of reefs are already encompassed in a range of parks and reserves, more than any other marine habitat. However, only six percent of reefs are in protected areas that are effectively managed.

'Well managed marine protected areas are one of the best tools to safeguard reefs,' said Mark Spalding, senior marine scientist at the Nature Conservancy and also a lead author of the report. 'At their core, reefs are about people as well as nature: ensuring stable food supplies, promoting recovery from coral bleaching, and acting as a magnet for tourist dollars. We need to apply the knowledge we have to shore up existing protected areas, as well as to designate new sites where threats are highest, such as the populous hearts of the Caribbean, Southeast Asia, East Africa and the Middle East,' he added.

Reefs offer multiple benefits to people and the economy - providing food, sustaining livelihoods, supporting tourism, protecting coasts, and even helping to prevent disease. According the report, more than 275 million people live in the direct vicinity (30 km/18 miles) of coral reefs. In more than 100 countries and territories, coral reefs protect 150,000 km (over 93,000 miles) of shorelines, helping defend coastal communities and infrastructure against storms and erosion.

For the first time, the report identifies the 27 nations most socially and economically vulnerable to coral reef degradation and loss. Among these, the nine most vulnerable countries are: Haiti, Grenada, Philippines, Comoros, Vanuatu, Tanzania, Kiribati, Fiji, and Indonesia.

'The people at greatest risk are those who depend heavily on threatened reefs, and who have limited capacity to adapt to the loss of the valuable resources and services reefs provide,' said Allison Perry, project scientist at the WorldFish Center and a lead author. 'For highly vulnerable nations - including many island nations - there is a pressing need for development efforts to reduce dependence on reefs and build adaptive capacity, in addition to protecting reefs from threats.'

The report is an update of 'Reefs at Risk,' released by WRI in 1998, which served as an important resource for policymakers to understand and address the threats of reefs. The new report uses the latest data and satellite information to map coral reefs - including a reef map with a resolution 64 times higher than the original report.

'Through new technology and improved data, this study provides valuable tools and information for decision makers from national leaders to local marine managers,' said Katie Reytar, research associate at WRI and a lead author. 'In order to maximize the benefits of these tools, we need policymakers to commit to greater action to address the growing threats to coral reefs.'
...
Improvement in the collection and treatment of wastewater from coastal settlements benefits both reefs and people through improved water quality and reduced risk of bacterial infections, algal blooms, and toxic fish. Estimates show that for every US$1 invested in sanitation, the net benefit is US$3 to US$34 in economic, environmental, and social improvement for the nearby community.
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Both the live reef food fish—that is, fish captured to sell live in markets and restaurants—and the ornamental species trades are high-value industries. The ornamental species trade takes in an estimated $200 million to $330 million per year globally, with the majority of exports leaving Southeast Asian countries and entering the United States and Europe. The overall value of the industry has remained stable within the past decade, though trade statistics are incomplete. The live reef food fish trade is concentrated mainly in Southeast Asia, with the majority of fish exported from the Philippines and Indonesia and imported through Hong Kong to  China. Over time, the trade has expanded its reach, drawing exports from the Indian Ocean and Pacific islands, reflecting depleted stocks in Southeast Asia, rising demand, improvements in transport, and the high value of traded fish. The estimated value of the live reef food fish trade was $810 million in 2002. A live reef food fish sells for approximately four to eight times more than a comparable dead fish, and can fetch up to $180 per kilogram for sought-after species like Napoleon wrasse or barramundi cod, making it a very lucrative industry for fishers and traders alike.
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Despite this, the reefs are an important resource. Tourism on the Great Barrier Reef is a critical part of the region’s economy, generating US$5.2 billion in 2006.
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Live reef fish imported for food in Hong Kong in 2008 were reportedly worth an average of nearly US$10/kg, while humphead wrasse, the most valuable species, were worth more than US$50/kg.
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Estimating the economic value of coral reef-associated tourism typically focuses on its contributions to the economy, through tourist expenditures, adjusted for the operating costs of providing the service. A recent summary of 29 published studies on reef-associated tourism found a very wide range in values, from about US$2/ha/yr to US$1 million/ha/yr. However, most values fall within the narrower range of US$50/ ha/yr to US$1,000/ha/yr. The wide variation of values is strongly related to differences in the accessibility of places, with very low tourism values in remote locations that have limited tourism development and very high values in areas that have intensive tourism. For these reasons, it is not possible to undertake simple extrapolations of specific studies to entire reef tracts where demand and access may be very different.
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Although many economic valuation studies have focused on estimating the benefits of coral reef ecosystem services, some studies have also focused on changes in value—that is, what an economy stands to lose if a reef is degraded. For example, the 2004 Reefs at Risk in the Caribbean study estimated that, by 2015, the projected degradation of Caribbean reefs from human activities such as overfishing and pollution could result in annual losses of US$95 million to US$140 million in net revenues from coral reef-associated fisheries, and US$100 million to US$300 million in reduced tourism revenue. In addition, degradation of reefs could lead to annual losses of US$140 million to US$420 million from reduced coastal protection within the next 50 years. Other studies estimate that Australia’s economy could lose US$2.2 billion to US$5.3 billion over the next 19 years due to global climate change degrading the Great Barrier Reef, while Indonesia could lose US$1.9 billion over 20 years due to overfishing.
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There are numerous examples of economic analyses successfully informing policy. For example, in the United States, the states of Hawaii and Florida adopted legislation setting amounts for monetary penalties per square meter of damaged coral reef, based on calculations from valuation studies. The Belize government used an economic valuation study of its coral reefs as the premise to sue for damages after the container ship Westerhaven ran aground on its reef in January 2009, resulting in the Belizean Supreme Court ruling that the ship’s owners must pay the government US$6 million in damages. Finally, Bonaire National Marine Park, one of the world’s few self-financed marine parks, used economic valuation to determine appropriate user fees.
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Sample Values: Annual Net Benefits from Coral Reef-related Goods and Services (US$, 2010)

Extent of Study                    Tourism                              Fisheries              Shoreline Protection

Global a                                $11.5 billion                         $6.8 billion                  $10.7 billion
Caribbean (Regional) b          $2.7 billion                         $395 million      $944 million to $2.8 billion
Philippines & Indonesia c       $258 million                           $2.2 billion                $782 million
Belize (National) d         $143.1 mill.-$186.5 mill.**   $13.8 mill.-$14.8 mill.** $127.2 to $190.8 mill.
Guam (National) e                $100.3 million**                     $4.2 million**             $8.9 million
Hawaii (Subnational) f           $371.3 million                         $3.0 million              Not evaluated
* All estimates have been converted to US$ 2010.
** Estimates of the value of coral reef-associated fisheries and tourism for Belize and Guam are gross values, while all other numbers in the table are net benefits, which take costs into account.
a. Cesar, H., L. Burke, and L. Pet-Soede.2003. The Economics of Worldwide Coral Reef Degradation. Zeist, Netherlands: Cesar Environmental Economics Consulting (CEEC).
b. Burke, L., and J. Maidens. 2004. Reefs at Risk in the Caribbean. Washington, DC: World Resource Institute.
c. Burke, L., E. Selig, and M. Spalding.2002. Reefs at Risk in Southeast Asia. Washington, DC: World Resources Institute.
d. Cooper, E., L. Burke, and N. Bood. 2008. Coastal Capital: Belize The Economic contribution of Belize’s coral reefs and mangroves. Washington, DC: World Resource Institute.
e. H aider, W. et al. 2007. The economic value of Guam’s coral reefs. Mangilao, Guam: University of Guam Marine Laboratory.
f. Cesar, H. 2002. The biodiversity benefits of coral reef ecosystems: Values and markets. Paris: OECD.

Find out more at: www.wri.org/reefs, online resources, including maps, data, regional fact sheets, videos, and more.  The full report is available free of charge at http://www.wri.org/publication/reefs-at-risk-revisited

United Nations Environment Programme (UNEP)
Press Release dated February 23, 2011

Call for Papers: Society for Benefit-Cost Analysis annual conference

http://www.researchraven.com/files/pdfs/call-for-papers-conference/2011/6/15/call-for-papers-2011-society-for-benefit-cost-analysis-annual-conference.pdf

Abstracts due June 15, 2011

2011 Annual Conference and Meeting of the Society for Benefit-Cost Analysis: Expanding the Scope of Benefit-Cost Analysis: Practical Applications and Analytical Frontiers

October 21-22, 2011 at the L'Enfant Plaza Hotel in Washington, D.C.

The Society for Benefit-Cost Analysis promotes the development and appropriate application of benefit-cost analysis to a broad range of public policy issues. This year, our Fourth Annual Conference and Meeting continues the focus of past conferences on the practical use of Benefit Cost Analysis (BCA) in a variety of institutional and national settings, with special attention to the role of BCA in both prospective and retrospective program evaluation; and to broadening and improving measurement of benefits and/or costs. As always, we welcome abstracts on any topic related to improving the use of benefit-cost analysis, cost-effectiveness analysis, risk-benefit analysis, applied welfare economic analysis, and damage assessments in policy settings, from scholars, practitioners, and others interested in these areas who wish to present research at the conference.
Some examples of areas of interest including the following: - Developing innovative analytic tools and testing their application in case studies
- Extending the use of benefit-cost analysis to new policy areas
- Improving the use of benefit-cost analysis in decisionmaking
- Incorporating research on happiness, life-satisfaction
- Behavioral economics
- Developing principles and standards for benefit-cost analysis
- Determining the appropriate treatment of discounting
- Assessing and accounting for risk and uncertainty
- Valuing costs and benefits and assessing distributional impacts
- Incorporating moral sentiments and equity considerations
- The role of retrospective benefit cost analysis in program evaluation and policy analysis
- Evaluating the use of benefit-cost analysis in practice in the U.S. and other countries
- Communicating analytic results effectively

Abstracts should be 200-300 words in length and provide adequate detail on the content of the research. Proposals for panels that include three to four speakers are also welcome, and should include a summary of the overall focus of the panel as well as a 200-300 word abstract for each presentation. Note that the program committee reserves the right to select the panel abstracts and to reorganize the panels as needed. Submission of an abstract is viewed as a firm commitment to participate in the conference if accepted.

Abstracts and panel proposals should be submitted as email attachments in Word document (.doc) format to sbcainfo@uw.edu along with complete contact information for all prospective presenters (name, title, affiliation, email, phone, and address), by June 15, 2011. Please write "Abstract: SBCA 2011" in the subject of the email.

Please consider becoming a member of the Society. Learn more about joining the Society http: /benefitcostanalysis.org/membership/membership.
2011 Conference Program Committee
Joseph Cordes, Coordinator (The George Washington University), Glenn Jenkins (Queens University, Canada and Eastern Mediterranean University, Northern Cyprus). Clive Belfield, (City University of New York), Elena Ryan, (U.S. Department of Homeland Security), Trudy Ann Cameron (University of Oregon), and Tony Homan (U.S. Department of Transportation)