OMB’s Office of Information and Regulatory Affairs Releases Proposed Revisions to Regulatory Analysis Guidance

Source: RL Martin

On April 6, 2023, the U.S. Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) released proposed revisions to its government-wide guidance on regulatory analysis, known as Circular A-4. OIRA’s revisions aim to enable agencies to better consider the impacts of their regulations through better accounting for future risks and uncertainties in their cost-benefit analyses.

OIRA identifies numerous areas impacted by its proposed revisions in the preamble to Circular A-4, and offers questions for the public to comment on during its public comment period for the revisions. First, OIRA updated the discount rate for cost-benefit analyses to start at a 1.7 percent rate for years 2024-2089, and then step down by .1 percent every 10-15 years until 2172, to better account for benefits and costs of regulations that have long time frames. The proposed revisions also better enable agencies to analyze distributional effects by setting the value of the elasticity for marginal utility to 1.4. OIRA also expanded the guidance to provide additional information to help agencies account for uncertainty and risk by incorporating non-expected utility frameworks and subjective probability into agency analyses. These changes, in addition to the others offered by OIRA, aim to make the updated Circular A-4 enable better agency decision-making and better policy to improve societal outcomes while allowing for more effective use of agency resources. Since these revisions impact federal rules and regulations this will directly and indirectly impact state government actions and specifically State Energy Offices in the energy and environmental arena.

OIRA is looking for public comments on a wide range of questions associated with the proposed guidance revisions to solicit expertise from the general public. OIRA is encouraging interested parties to submit comments here. The public comment period will be open until June 6, 2023.