Heinzerling - Appointing an Atheist Dean of the Seminary

Although I disagree with a number of President Obama's policies, I appreciate many of his political appointment. I have a lot of respect for his future regulatory czar, Cass Sunstein, and I think Austen Goolsbee has been an excellent advisor. But Lisa Heinzerling's recent appointment as Associate Administrator for the Office of Policy, Economics, and Innovation in the Environmental Protection Agency is an odd and questionable move (HT: Volokh Conspiracy). (To be fair, I'm not sure whether President Obama or the Administrator of the EPA made this appointment.)

In her book Priceless (coauthored with Frank Ackerman) Heinzerling argues that EPA's reliance on cost-benefit analysis is dangerous because, among other things, the process of placing a monetary value on human life devalues it. Heinzerling therefore feels that economics should play a very limited role (if any) in EPA's policy making. She instead urges EPA to make decisions holistically, like the military. (Dean Revesz, a defender of cost-benefit analysis and author of Retaking Rationality, notes with a hint of irony that the decision-making process leading to the Iraq war is the one Heinzerling wants to apply to environmental decisions.)

Though I don't agree with Heinzerling's ideas, I respest her work on cost-benefit analysis. Her critique of CBA helped me to refine my personal views. Still, a few things bother me about this appointment:

First, her appointment seems to be at odds with the mission of Office of Policy, Economics, and Innovation. Thus appointing Heinzerling is the equivalent of choosing an atheist to be the dean of a seminary.

The second reason I feel that Heinzerling is a poor choice is that her views are at odds with regulatory czar Cass Sunstein, who will head the regulatory agency that has oversight over EPA's economic analyses.

It will be interesting to see what changes, if any, Heinzerling's appointment brings.

Coal Ash Regulation

Coal ash from power plants is often stored in local ponds. Although the polluted water becomes extremely dangerous (you want an ice cold glass of coal sludge?), power companies usually build sturdy walls around the sludge ponds to prevent seepage. In December of 2008, however, a Tennessee Valley Authority containment wall in eastern Tennessee broke, spilling 300 million gallons of sludge and flooding 15 homes. The image above shows one of the homes (photo courtesy of the Freakonomics blog and Dorothy Griffith).

The Environmental Protection Agency recently announced that it would begin monitoring coal ash disposal sites. It identified 44 high hazard potential sites, places that are most likely to experience a similar spill. Although this is a great first step, EPA needs to clearly outline its plans for regulating coal ash. According to Stephen Smith:

It’s still unclear to me what the E.P.A.’s ultimate goal here is to do. Are they really going to aggressively regulate this material like they need to, or are they taking more of a hands-off approach?

It will be interesting to see how the EPA handles this issue in the coming months.