The recent flurry of scholarship and debate¹ over the use of cost-benefit analysis (CBA) in environmental policymaking is still largely academic. However strongly the academy feels one way or the other, the role of CBA in environmental policymaking does not appear to be changing dramatically. Even the Senate confirmation of the controversial John Graham to an important Office of Management and Budget (OMB) post² is not likely to substantially change policy, given the scrutiny his decisions will now receive. Undoing the U.S. Supreme Court decision in Whitman v. American Trucking Ass'n,³ which upheld a U.S. Environmental Protection Agency (EPA) interpretation of the Clean Air Act (CAA) to establish ambient air quality standards without regard to cost,⁴ will require an amendment of the CAA, an unlikely event given the persistence of congressional partisanship. This Dialogue seeks to contribute to the growing body of scholarship that argues for a wider use of CBA, in the hopes of winning over some of the last vestiges of resistance. Eventually, we hope that broader acceptance of CBA in the academy and among environmental advocates will lead to its broader use in policymaking. We will press a now-familiar argument that CBA is, if not an exact science, a better tool for decisionmaking than the alternatives, but we will do so in a policy area that has heretofore been ignored: natural resource policy.

Fortunately for the economics profession, CBA has already insinuated itself into many environmental policy and policymaking processes. The case of the ambient air quality standards at issue in American Trucking is not necessarily representative of pollution control statutes; much statutory environmental law at least implicitly acknowledges a "balancing" or "reasonableness" approach to standard-setting processes, if not explicitly calling for the use of CBA.⁵ Even where statutes call for standards to be keyed to technological feasibility, there is often an indirect mandate for consideration of the costs and benefits of regulation.⁶ And in any case, President Ronald Reagan's Executive Order No. 12991, as modified by President William J. Clinton, requires CBA for any "major" rule or regulation, which is defined as any rule or regulation that is likely to result in "an annual effect" on the economy of more than $ 100 million.⁷ Since most significant environmental regulations have at least such an impact, this Executive Order is thought to [32 ELR 10240] cover most new federal environmental regulatory decisions anyway.