To protect health and the environment while aiding U.S. job growth, federal agencies must use consistent, sound and transparent information and consider true costs to the economy and jobs when creating regulations.

Policy Background

The ability of America’s chemistry industry to innovate, compete and create jobs in a global market hinges largely on striking the right balance in government regulation. Regulations that are based on faulty information often waste private and public sector resources, harm American businesses and jeopardize investment in the United States and American jobs.

Today’s regulatory system routinely uses and produces conflicting information. For example, one agency may determine that a regulation will create jobs and another that jobs will be lost. There also is a lack of standards for choosing and applying scientific information when creating regulations, which results in inconsistent and unfair rules that harm innovation, investment and job creation. In addition, agencies do not always make public the information used to create regulations.

A prime example can be seen in the U.S. Environmental Protection Agency (EPA's) Integrated Risk Information System (IRIS) program, which is a critical component of EPA's capacity to support scientifically sound environmental regulations and policies, and is a leading source of health risk information for other federal, state, and international regulatory bodies. In April of this year, a National Academies of Science (NAS) panel issued an independent scientific review of the IRIS assessment of formaldehyde. The panel determined that EPA had failed to provide scientific evidence to support the conclusions it had reached on the substance. This is not an isolated finding—the Academy has found similar fundamental, serious deficiencies in other assessments. In their review, the expert committee felt so strongly about the persistence of problems that it included a separate chapter setting a roadmap for revision for all assessments, "critical for the development of a scientifically sound IRIS assessment."

President Obama and members of Congress have called for a review of existing regulations to ensure they are not creating an undue burden on American businesses and hindering innovation and competitiveness or costing U.S. jobs.

ACC’s Policy Position

Regulatory reform must go beyond examining individual rules and fix the underlying deficiencies in the way agencies develop regulations so proposed rules are more rational from the start. To improve the regulatory process, federal agencies must realistically determine economic impacts of proposed rules, create consistent standards for using scientific data and be more transparent.

• Federal agencies must determine the cumulative impacts of overlapping regulations to determine the full economic costs and job consequences of proposed rules.

• Regulatory agencies must establish clear and transparent standards for the use of scientific data in rule making, including uniform criteria for the relevance, quality and reliability of data. These standards will ensure that the information used to develop regulations is objective and credible and that agencies have sound scientific support for economic decisions.

• All IRIS assessments in progress should incorporate the recommendations described in the NAS panel’s formaldehyde report. IRIS assessments that are currently in draft form, or that will be issued as draft for public comment and peer review in 2011 and 2012, should be submitted to the NAS for independent scientific peer review. Longer term, permanent changes are needed to strengthen IRIS to ensure public health and safety.

• There must be greater transparency in rule making so Americans can understand the methodologies and impacts of proposed rules. For example, economic assessments of proposed regulations completed by federal agencies should be made public.

America needs sound regulations that protect health and the environment while also ensuring that businesses have the opportunity to grow and thrive. These improvements in the regulatory system will enable the business of chemistry and other manufacturers to continue innovating and creating American jobs.

Resources:

• EPA’s IRIS Program Requires Major Overhaul
• Steps Needed to Overhaul IRIS
• IRIS Reform Case Study—Formaldehyde
• Cal Dooley Letter to Administrator Jackson Calling on EPA to Fix Dioxin Reassessment Before Finalizing
• Testimony of ACC President and CEO Cal Dooley Before Congress re: “EPA’s IRIS Program: Evaluating the Science and Process Behind Chemical Risk Assessment”
• ACC Letter to House Energy and Commerce Committee Welcoming IRIS Hearing
• ACC Asked Assistant to the President David Lane and OIRA Administrator Cass Sunstein to Address Fundamental Problems with Chemical Assessments
• Cal Dooley Addressed the Toxicology Forum’s Annual Meeting and Called for Sound Chemical Risk Assessments and Effective Chemical Regulation
• ACC Asked Office of Information and Regulatory Affairs (OIRA) Administrator Cass Sunstein for Increased Oversight of the Scientific Basis for Agency Actions
• ACC Asked OMB Director Jacob Lew to Lead an Effort to Reform Chemical Safety Assessment Programs
• ACC Letter to Administrator Lisa Jackson re: IRIS