Notice2023-16272
Request for Comments on Proposed Guidance for Assessing Changes in Environmental and Ecosystem Services in Benefit-Cost Analysis
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Published
August 2, 2023
Issuing agencies
Management and Budget Office
Abstract
The Office of Management and Budget (OMB) is requesting comments on proposed guidance for assessing changes in environmental and ecosystem services in benefit-cost analysis.
Full Text
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<title>Federal Register, Volume 88 Issue 147 (Wednesday, August 2, 2023)</title>
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[Federal Register Volume 88, Number 147 (Wednesday, August 2, 2023)]
[Notices]
[Pages 50912-50914]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-16272]
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OFFICE OF MANAGEMENT AND BUDGET
Request for Comments on Proposed Guidance for Assessing Changes
in Environmental and Ecosystem Services in Benefit-Cost Analysis
AGENCY: Office of Management and Budget.
ACTION: Notice of availability and request for comments.
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[[Page 50913]]
SUMMARY: The Office of Management and Budget (OMB) is requesting
comments on proposed guidance for assessing changes in environmental
and ecosystem services in benefit-cost analysis.
DATES: Comments are requested on the proposed Circular on or before
September 18, 2023.
ADDRESSES: The proposed Guidance is available at <a href="https://www.whitehouse.gov/wp-content/uploads/2023/08/DraftESGuidance.pdf">https://www.whitehouse.gov/wp-content/uploads/2023/08/DraftESGuidance.pdf</a>.
Please submit comments via <a href="http://www.regulations.gov">http://www.regulations.gov</a>, a Federal
website that allows the public to find, review, and submit comments on
documents that agencies have published in the Federal Register and that
are open for comment. Simply type ``OMB-2022-0016'' in the search box,
click ``Search,'' click the ``Comment'' button underneath ``Request for
Comments on Proposed Guidance for Assessing Changes in Environmental
and Ecosystem Services in Benefit-Cost Analysis,'' and follow the
instructions for submitting comments. All comments received will be
posted to <a href="http://www.regulations.gov">http://www.regulations.gov</a>, so commenters should not include
information they do not wish to be posted (e.g., personal or
confidential business information).
FOR FURTHER INFORMATION CONTACT: Office of Management and Budget,
Office of Information and Regulatory Affairs, at
<a href="/cdn-cgi/l/email-protection#2f626d770160626d0160667d6e016a7c685a464b4e414c4a7f6c7e6f40424d014a405f01484059"><span class="__cf_email__" data-cfemail="49040b116706040b6706001b08670c1a0e3c202d28272a2c190a180926242b672c2639672e263f">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Background: In the process of designing appropriate regulations,
agencies prepare regulatory impact analyses (RIAs) for certain rules--
consistent with Office of Management and Budget (OMB) Circular A-4--
that sometimes involve environmental and ecosystem services
(collectively ``ecosystem services''). Agencies also prepare benefit-
cost analyses of public investments--consistent with OMB Circular A-
94--that can involve ecosystem services, which are all relevant
contributions to human welfare from the environment or ecosystems. In
order to encourage continued improvements in valuing changes to
ecosystem services in benefit-cost analyses of regulations or public
investments, OMB's Office of Information and Regulatory Affairs (OIRA)
is releasing proposed Guidance for Assessing Changes in Environmental
and Ecosystem Services in Benefit-Cost Analysis (Guidance). OMB, in
consultation with the Office of Science and Technology Policy as well
as relevant agencies and Executive Office of the President components,
has drafted and proposes this Guidance. OMB now invites public comment
on this proposed Guidance and is simultaneously initiating a peer
review process with respect to it.
OMB believes that the benefits of this proposed Guidance will be
substantial. Many benefit-cost analyses involve ecosystem services, and
standardized guidance on how to assess relevant changes and how to
value such services will help promote consistency and predictability in
these analyses. The Guidance also aims to make incorporating ecosystem-
service considerations easier for agencies conducting these analyses,
resulting in lower analytic burdens for agencies and more sound
analysis. While there are costs associated with performing more robust
analyses of ecosystem-service effects--as well as with drafting and
transitioning to new guidance--OMB believes that the benefits of better
analysis and better-informed public discourse resulting from this
proposed Guidance are likely to well exceed those costs.
Some of the motivations for the proposed Guidance, and some
considerations that OMB would like to highlight, are elaborated below.
OMB requests comments on all aspects of the proposed Guidance. And OMB
specifically requests comment on various aspects of the proposed
Guidance as detailed later in this Notice.
Origins of, and Reasons for, the Proposed Guidance: To manage
resources optimally, agencies should assess the full suite of important
impacts their actions have on the nation's natural assets, including
benefits and costs to both the assets that an agency manages directly
and to those managed by others, including, for example, other agencies;
State, Tribal, Territorial, and local governments; and private resource
managers. Interest in thoughtfully managing natural assets has a long
history in the United States, from the recent Executive Order (E.O.)
14072 \1\ to similar calls dating back well over a century.\2\ This
interest has resulted in a variety of agency efforts over the years to
better analyze effects on natural assets and on the ecosystem services
that they deliver.\3\ These efforts are generally consistent with one
another, but sometimes differ with respect to scope and focus,
highlighting the need for government-wide guidance to help facilitate
interagency consistency and coordination on ecosystem service analyses
in the context of benefit-cost analysis. Given that certain agencies
have developed their own ecosystem-service guidance documents--based on
their own programs and statutory authorities--but others have not, a
government-wide guidance will also help additional agencies develop
their own expertise more quickly, so that they too can engage on
ecosystem-service questions when relevant.
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\1\ Executive Order No. 14072, Strengthening the Nation's
Forests, Communities, and Local Economies, 87 FR 24,851 (Apr. 27,
2022).
\2\ See, e.g., Theodore Roosevelt, Message to the Senate and
House of Representatives (Dec. 8, 1908), <a href="https://history.state.gov/historicaldocuments/frus1908/message-of-the-president">https://history.state.gov/historicaldocuments/frus1908/message-of-the-president</a>.
\3\ See, e.g., Env't Prot. Agency, Metrics for National and
Regional Assessment of Aquatic, Marine, and Terrestrial Final
Ecosystem Goods and Services (2020), <a href="https://nepis.epa.gov/Exe/ZyPDF.cgi/P1010Y7B.PDF?Dockey=P1010Y7B.PDF">https://nepis.epa.gov/Exe/ZyPDF.cgi/P1010Y7B.PDF?Dockey=P1010Y7B.PDF</a>; U.S. Forest Serv.,
Integrating Ecosystem Services into National Forest Service Policy
and Operations (2017), <a href="https://www.fs.usda.gov/research/treesearch/53358">https://www.fs.usda.gov/research/treesearch/53358</a>; U.S. Army Corp of Engrs., Using Information on Ecosystem
Goods and Services in Corps Planning: An Examination on Authorities,
Policies, Guidance, and Practices (2013), <a href="https://www.iwr.usace.army.mil/portals/70/docs/iwrreports/egs_policy_review_2013-r-07.pdf">https://www.iwr.usace.army.mil/portals/70/docs/iwrreports/egs_policy_review_2013-r-07.pdf</a>.
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The importance of standardized guidance for ecosystem-service
analyses is reflected in E.O. 14072, which calls for OMB to ``issue
guidance related to the valuation of ecosystem and environmental
services and natural assets in Federal regulatory decision-making,
consistent with the efforts to modernize regulatory review required by
my Presidential Memorandum of January 20, 2021 (Modernizing Regulatory
Review).'' \4\ That Presidential Memorandum, in turn, ``reaffirms the
basic principles set forth in'' E.O. 12866 and E.O. 13563.\5\ These
longstanding principles include assessing environmental costs and
benefits, including ecosystem service effects.\6\ Since then, E.O.
14094 again
[[Page 50914]]
emphasized a commitment to these principles.\7\
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\4\ Id. Sec. 4(b), 87 FR at 24,854.
\5\ Memorandum of January 20, 2021, Modernizing Regulatory
Review Sec. 1, 86 FR 7223, 7223 (Jan. 26, 2021).
\6\ Executive Order No. 12866, Regulatory Planning and Review
Sec. 1, 58 FR 51,735, 51,735 (Oct. 4, 1993) (``[I]n choosing among
alternative regulatory approaches, agencies should select those
approaches that maximize net benefits (including . . . environmental
. . . advantages . . .), unless a statute requires another
regulatory approach.''); Executive Order No. 13563, Improving
Regulation and Regulatory Review Sec. 1(b), 76 FR 3821, 3821 (Jan.
21, 2011) (reaffirming the same); see also Memorandum of January 20,
2021 Sec. 2(a), 86 FR at 7223 (listing ``environmental
stewardship'' as one of the values that the regulatory review
process should promote).
\7\ Executive Order No. 14094, Modernizing Regulatory Review
Sec. 1(a), 88 FR 21,879, 21,879 (Apr. 11, 2023).
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The Presidential Memorandum and these executive orders all
emphasize considering impacts on the environment when assessing
benefits and costs, but they do not provide detailed direction to
agencies regarding how they should incorporate ecosystem service
impacts into benefit-cost analyses. Actions affecting a natural asset
or an associated ecosystem service often interact with natural, built,
and social systems to yield benefits, costs, and transfers. Agencies
currently vary in how they consider these dynamics and how they define,
analyze, and report the resulting impacts. The call for additional
guidance regarding ecosystem services from E.O. 14072 section 4(b) \8\
follows other, recent calls for similar guidance to address these
questions.\9\ The proposed Guidance seeks to clarify the existing
guidance provided in Circulars A-4 and A-94, with the goal of yielding
more predictable, robust, and consistent treatment of ecosystem
services in benefit-cost analyses. Through harmonized guidance, it also
aims to achieve: improved consistency and predictability in benefit-
cost analyses that involve ecosystem services, lower burdens to
incorporating ecosystem-service considerations into analyses, and
better information to help guide agency decisions when ecosystem
services are involved.
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\8\ Executive Order No. 14072 Sec. 4(b), 87 FR at 24,854.
\9\ See Shaun Donovan, Christina Goldfuss & John Holdren, M-16-
01: Incorporating Ecosystem Services into Federal Decision Making
(Oct. 7, 2015), <a href="https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/memoranda/2016/m-16-01.pdf">https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/memoranda/2016/m-16-01.pdf</a>.
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Relationship with Other Guidance: The proposed Guidance is intended
to be fully consistent with--and a faithful application of--the
principles and guidelines in Circulars A-4 and A-94. Much in the
proposed Guidance cross-references applicable sections in Circular A-
4--and, per a paragraph on page 1, analogous sections of Circular A-94
\10\--to address certain analytical steps.
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\10\ For example, where the proposed Guidance references the
Circular A-4 section ``Discount Rates,'' readers performing analyses
consistent with Circular A-94 should refer to the Circular A-94
section ``Discount Rate Policy.''
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Many analytical steps that are important for assessing impacts on
ecosystem services are covered within Circulars A-4 and A-94.
Therefore, what this Guidance covers in the greatest depth is not
necessarily what is most important for ecosystem-service analysis. For
example, deciding on appropriate valuation methods--such as stated-
preference or revealed-preference methods--is often a challenging step
when valuing ecosystem services. To avoid duplication, this proposed
Guidance generally directs readers to Circulars A-4 and A-94 on this
topic, as valuation techniques are discussed there. The proposed
Guidance instead focuses on highlighting examples of such methodologies
that may be applied to analyses of ecosystem services. Similarly,
choosing a discount rate or analytical time horizon is important to
valuing ecosystem services, but most pertinent considerations to make
such decisions are in Circulars A-4 and A-94; the proposed Guidance
devotes little space to discussing those topics, instead referencing
those circulars.
As noted above, the proposed Guidance explains that it references
sections in Circular A-4; agencies conducting analyses consistent with
Circular A-94 instead of Circular A-4 should reference analogous
sections within the applicable circular. OMB proposes this arrangement
for brevity and to avoid undue repetition by avoiding references to two
documents every time the proposed Guidance mentions one. OMB welcomes
comment on whether that arrangement is sufficiently clear for
practitioners preparing analyses consistent with Circular A-94. OMB
also welcomes comment on opportunities for tailoring the proposed
Guidance more carefully to the context of such analyses. For example,
are there issues that are particularly relevant to valuing ecosystem
services in the public-investment context that would benefit from
additional detail in the proposed Guidance?
On April 6, 2023, OMB separately released proposed revisions to
Circulars A-4 and A-94 and called for public comment on them. The
proposed Guidance is intended to be consistent with current versions of
those Circulars as well as the proposed updates to them. Stated
differently, nothing in the proposed Guidance is meant to depend on any
of the proposed changes to either Circular A-4 or Circular A-94. The
proposed updates to both Circulars cross-reference the final version of
this proposed Guidance for further guidance on valuing ecosystem
services.
In addition to Circulars A-4 and A-94, as noted above and in the
proposed Guidance, many agencies also have internal guidelines for
analyzing ecosystem services. The proposed Guidance represents OMB's
recommended best practices for such analyses in benefit-cost analysis
and should be generally consistent with more specific agency guidance.
Insofar as this Guidance, when finalized, conflicts with any internal
guidance, agencies should consult with OMB. Moreover, agencies should
always refer to their operative statutory authorities and, if their
authorities are inconsistent with the proposed Guidance, should defer
to the relevant statute.
Requests for Comment: While OMB invites comment on any aspect of
the proposed Guidance, OMB specifically solicits comment on the
following aspects:
(1) whether addressing any further topics related to ecosystem
services would be useful;
(2) whether the material could be presented more clearly for
affected public stakeholders, including how the proposed Guidance
discusses its preference for monetization when feasible, and when
not, then quantification when feasible, and when not, then qualitive
description;
(3) whether the discussion of especially difficult-to-quantify
and difficult-to-monetize ecosystem services, such as cultural
services and existence value, is appropriate and sufficient;
(4) whether methodologies to quantify or describe ecosystem
services that cannot be monetized are sufficiently described;
(5) whether integration with and references to Circulars A-4 and
A-94 efficiently cross-reference the relevant details in the related
documents;
(6) whether and how the proposed Guidance conflicts with other
related guidance documents from OMB or agencies;
(7) whether to refine guidance on potential double-counting of
effects; and
(8) whether to refine guidance on accounting for stocks versus
flows.
Richard L. Revesz,
Administrator, Office of Information and Regulatory Affairs.
[FR Doc. 2023-16272 Filed 8-1-23; 8:45 am]
BILLING CODE 3110-01-P
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