Distinguished Economist Finds EPA Economic Analysis Flawed

EPA’s report severely underestimates the effects on local communities and the national economy

Texas Wildlife Association (TWA) notes with interest the release of Dr. David Sunding’s report, Review of 2014 EPA Economic Analysis of Proposed Revised Definition of Waters of the Unites States. The report examines the U.S. Environmental Protection Agency’s (EPA) estimates of probable costs and benefits associated with the proposed rule on “Waters of the United States,” and finds that EPA significantly underestimates the economic impacts the rule will have on local communities and businesses. Dr. Sunding is an economist on the faculty of the University of California-Berkeley and a principal with The Brattle Group.

The proposed rule includes a significant expansion of the term “Waters of the United States” to include previously unregulated waters located in floodplains and riparian areas, ditches, and the all-inclusive “other waters.”

Dr. Sunding chronicles how EPA systematically excluded costs, underrepresented jurisdictional areas and used flawed methodologies to arrive at much lower economic impacts. He also examines how the lack of transparency in the report makes it difficult to understand or replicate the calculations, evaluate the underlying assumptions, or understand discrepancies in the results. Dr. Sunding explains how EPA’s analysis downplays non-404 impacts, resulting in an artificially small increase in jurisdictional waters. A full copy of his report is available online:

Dr. Sunding concluded that the errors in the study are so extensive as to render it unusable for determining the true cost of the proposed rule. His report underscores the need for EPA to withdraw the rule and complete a comprehensive and transparent economic review.

“This rule will have widespread impacts on communities across the country,” said a spokesman for the Waters Advocacy Coalition. “It is not just businesses trying to expand in this struggling economy that will suffer, but the proposed rule would impact everything from local governments trying to start or expand infrastructure projects to community gardens. It will dictate land use decisions across the United States. It is a far-reaching expansion of the EPA’s jurisdiction, and the EPA has not been forthright about the costs to our businesses and communities.”

According to TWA President, Greg Simons, "Water is a central necessity for our entire Texas citizenry, and when you consider that the vast majority of Texas water resources are tied directly or indirectly to private lands stewardship, it is absolutely imperative that private landowners be granted the tools and incentives to be good care-takers of those private lands resources, ultimately benefitting all Texans. TWA strongly opposes any expansion of federal regulations that compromise landowners' rights and encumbers or adds costs to landowners' abilities to effectively and efficiently manage the natural resources found on their lands."

The report was commissioned by the Waters Advocacy Coalition (WAC), which represents the nation’s construction, real estate, mining, agriculture, wildlife conservation, forestry, manufacturing and energy sectors, and of which TWA is a member. As part of WAC, TWA will continue to push for EPA to withdraw this proposed rule, and work to develop a better rule that balances the needs of affected communities with protections for “Waters of the United States.”

TWA, with a membership of 6400+ members who represent some 40 million acres of private land in Texas, was formed in 1985 to serve as an advocate for private landowners, hunters, and other wildlife/outdoor stakeholders.

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