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May 18, 2004
Regulators: Setting a Standard for Inefficiency
Cindy Skrzycki writes in her Washington Post column this week about a regulatory failure of the Department of Energy (DOE). In January of 2001, the DOE published the final version of a rule that called for increasing the efficiency of commercial water heaters. Manufacturers raised no complaint and maintained that they already had the technology to meet the new standard. So why are these companies today operating under waivers from compliance? The answer is that the DOE failed to complete a companion rule to update a mandatory test that would prove whether a company complies with the new efficiency standard. Producers of commercial water heaters have urged the DOE to adopt the new test, and many have proposed tests of their own. The DOE, however, has yet to approve a new test, and has consequently prevented manufacturers, retailers and distributors from advertising or stating the energy consumption of their products.
In the paper, Can Government Reporting Help Bring Rationality to Regulation? Robert Hahn and Erin Layburn use objective measures to provide a comprehensive evaluation of reports from the Office of Management and Budget (OMB) on the costs and benefits of federal regulation. They conclude that OMB’s annual reports represent a significant step forward in providing insights into the regulatory process as well as the costs and benefits of regulation. However, a review of the reports also illustrates some of the problems with having a government agency do such an analysis. They offer several recommendations that address these problems, including increasing the use of scorecards that summarize the strengths and weaknesses of each agency regulation.
Also of interest from the Joint Center:
Is Regulation Good for You? Robert W. Hahn and Rohit Malik
The Economic Analysis of Regulation: A Response to the Critics Robert W. Hahn
Posted by the Joint Center at May 18, 2004 09:20 AM
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