White House CEA: Capping Environmental Reviews at 2 Years Would Add $82B to $164B a Year to Long-Run GDP
The White House Council of Economic Advisers (CEA) released a study on October 28, The Economic Benefits of Permitting Reform, estimating that capping federal environmental reviews at two years would add $82 billion to $164 billion a year to long-run U.S. gross domestic product (GDP), and that cutting the limit to one year would add $120 billion to $243 billion a year. The study was published on the White House research page on October 28.
The study says the National Environmental Policy Act (NEPA) acts as an umbrella for environmental review, requiring agencies to evaluate environmental impacts before projects can proceed, covering both direct federal actions and private projects requiring federal permits. Environmental impact statements (EISs) published in recent years have averaged roughly 1,700 pages including appendixes, and agencies took on average 4.2 years to complete them. Long delays discourage investment because they force investors to wait longer for returns, resulting in insufficient infrastructure investment and a lower quantity of capital per worker, which leads to higher prices and lower output, the study says.
The study models the Bipartisan American Affordability and Jobs Act (BAAJA), which would institute enforceable NEPA review deadlines requiring agencies to complete EISs within two years. Under that scenario, long-run GDP would increase by 0.28 percent to 0.56 percent, or $82 billion to $164 billion in additional output each year; annual tax revenue would rise by $14 billion to $28 billion; real wages would rise by $306 to $637 per year for the average household; electric bills would fall by $178 to $251 per year; and other expenses would fall by $125 to $176 per year.
Reducing completion time further, to one year, would increase long-run GDP by 0.41 percent to 0.83 percent ($120 billion to $243 billion a year), raise annual tax revenue by $20 billion to $41 billion, raise real wages by $445 to $922 per year for the average household, cut electric bills by $259 to $366 per year, and reduce other expenses by $184 to $257 per year, the study estimates.
The CEA says its findings are likely conservative for two reasons. First, the analysis is limited to environmental impact statements and does not account for environmental assessments (EA), which are significantly more numerous and similarly delay realized investment. Second, NEPA allows for litigation delays, which introduce additional uncertainty into investment decisions; the model does not quantify the benefits of reducing that uncertainty or the financial costs of litigation.
Source: GSM · USA (original Chinese edition)
Photo: 图：Michigan州696号州际公路与M-1公路立交航拍（资料图）。照片：Karen Breen-Bondie，CC BY-SA 2.0，经 Wikimedia Commons
