White House projects $82–164bn annual output gain from permit reform
The White House analysis estimates that a proposed two-year environmental-review deadline would save the average household $178–251 a year on electricity.
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The White House analysis estimates that a proposed two-year environmental-review deadline would save the average household $178–251 a year on electricity.
The White House Council of Economic Advisers (CEA), which advises the US president on economic policy, projects that cutting environmental-review times to two years would increase long-run US gross domestic product—the value of goods and services produced—by $82–164 billion annually, or 0.28–0.56%. These are conditional model estimates, not gains already recorded.
In its October 28 analysis, the council says agencies took an average of 4.2 years to complete environmental impact statements in recent years. It models a reduction to the two-year deadline proposed in the Bipartisan American Affordability and Jobs Act (BAAJA).
Analysis
Environmental impact statements evaluate a project’s potential environmental effects under the National Environmental Policy Act. The reviews cover direct federal actions and private projects requiring federal permits. A statement typically also lists the other federal permits a project needs before it can proceed.
CEA’s explanation starts with the wait for investment returns. Longer delays discourage infrastructure investment, leaving fewer productive assets, or capital, available per worker. In the model, shortening that wait encourages investment and increases capital per worker, raising output and lowering prices.
Analysis
The council projects the following annual changes if review times fall to two years. The household figures are for the average household; real wages means wages adjusted for prices.
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| Measure | Projected change |
|---|---|
| Long-run US GDP | Increase of $82–164 billion, or 0.28–0.56% |
| Tax revenue | Increase of $14–28 billion |
| Household real wages | Increase of $306–637 |
| Household electricity bills | Reduction of $178–251 |
| Other household expenses | Reduction of $125–176 |
Analysis
CEA says its estimates are likely conservative because the model excludes environmental assessments, a less burdensome form of review. The council says these assessments are significantly more numerous than environmental impact statements and also delay investment returns.
The model also leaves unquantified any investment gains from reducing uncertainty caused by litigation, as well as any reduction in litigation costs. CEA says legal delays add uncertainty to investment decisions and that, in standard investment models, greater uncertainty reduces investment.
Under the bill as described by CEA, federal agencies would face an enforceable two-year deadline to complete environmental impact statements.
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