The application of cost-benefit analysis to environmental health and safety regulation, although criticized for obstructing the achievement of legislated health and environmental goals,¹ has been hailed as the cure for the adverse economic impacts resulting from such regulation. Industry complaints that environmental regulation costs too much has led to congressional and administrative efforts to make regulations more "efficient" by requiring costs of controls to be justified by greater benefits. The Reagan Administration recently addressed this question by proposing that regulatory agencies such as the Occupational Safety and Health Administration (OSHA) rely on cost-benefit analysis in establishing environmental, health, and safety regulations.² However, a recent Supreme Court decision, American Textile Manufacturers Institute, Inc. v. Donovan,³ which upheld OSHA's standard regulating cotton dust in the workplace, raises serious doubts about the use of cost-benefit analysis as a basis for establishing not merely OSHA standards, but those promulgated under other environmental statutes as well.

The Cotton Dust decision answered the question left so glaringly open in the Supreme Court's Benzene decision, Industrial Union Department, AFL-CIO v. Marshall.⁴ In Benzene, the Court found that OSHA had failed to make the requisite threshold finding, supported by substantial evidence, that the regulated substance posed a significant risk to worker health. The Court, in invalidating the standard, found it unnecessary to determine whether OSHA must balance costs and benefits in setting a standard regulating occupational exposure to hazardous substances.In Cotton Dust, the Court concluded that the Occupational Safety and Health Act (OSH Act)⁵ does not require OSHA to conduct a cost-benefit analysis when setting health standards to protect workers from toxic substances and harmful physical agents. Indeed, the opinion suggests that cost-benefit analysis may be precluded.