Toxic train wrecks are the high cost of rigged cost-benefit analysis

Toxic and even deadly train wrecks like the one in East Palestine, Ohio, are the high cost of a regulatory system rigged to favor big corporations over the needs of ordinary Americans.

One of the major culprits that contributed to the severity of this disaster — with a heavy assist from millions of dollars in rail industry lobbying and campaign contributions — is regulatory cost-benefit analysis.

If you’re unfamiliar with its problematic history, how easy it is to manipulate, how often it turns out wrong, and its disastrous consequences in the real world, it may be tempting to believe that we can pick the best policy by neatly tallying up and weighing all the pros and cons.

But cost-benefit analysis itself is a con. It’s a corporate-lobbyist-backed pseudoscience — only slightly better than gazing into a crystal ball — that for decades has misled regulators into delaying, diluting, and denying urgently needed public protections, including higher safety standards for trains.

Cost-benefit analysis is rigged to favor industry and breathtakingly easy to manipulate — vastly overcounting the costs and undercounting the benefits of proposed safeguards. Indeed, many benefits are intangible values like freedom, equality, future safety, and peace of mind that are impossible to monetize. In the Trump years, cost-benefit analysis frequently morphed into cost-only analysis, in which the benefits of stronger standards to regular people were altogether ignored.

That’s what happened with a Trump-era analysis that became at least part of the basis for throwing out a rule that would have required trains to install modern electronic brakes. Shockingly, the Trump administration’s analysis omitted up to $117 million in estimated future damages from train derailments that could be avoided by installing electronic brakes, the Associated Press found and the U.S. Department of Transportation then admitted.

In their analysis, government economists left out the most common type of derailment, in which spilled and burning chemicals lead to property and environmental damage but there are no mass casualties — precisely what happened to the Norfolk Southern train in Ohio. Electronic brakes would reduce damages from those derailments by up to $117 million. But Trump-era economists left that out of their tally, and now East Palestine and other nearby communities are paying the price.

Regulators need to quickly take steps to restore the electronic braking rule or put in place an even stronger one. The Department of Transportation, led by Secretary Pete Buttigieg, can accomplish this by redoing the cost-benefit analysis — just as Sen. Jeff Merkley (D-Ore.), environmental groups, policy experts, and even other agencies have asked.

Nevertheless, even if this train safety rule gets another chance, the decades-old problem of cost-benefit chicanery interfering with commonsense safeguards remains. The good news is that a solution may be forthcoming within a matter of weeks — at least that’s what many regulatory reform advocates are hoping.

On Day One of his presidency, President Joe Biden issued an executive order authorizing a wholesale revamp of the rulemaking process to make it more efficient, equitable, transparent and accountable. Much of the rulemaking process is rooted in the administrative state, rather than legislative statutes, so Biden could implement this without involving Congress. After more than two years, the administration is expected to release its draft proposal for modernizing regulatory review sometime this spring.

It’s worth keeping an eye out for the administration’s forthcoming proposal — and commenting on it — because the rulemaking process affects our communities, our environment, and our lives. From airline and railroad safeguards to worker health and safety protections to consumer and business standards that level the playing field for everyone, the rules of the road matter.

Among the many issues it will touch on, the draft proposal may finally address the destructive role skewed cost-benefit analysis has played in sabotaging federal rulemaking — corrupting that process in favor of giant corporations to the detriment of regular people. The cost-benefit crystal ball should never be the deciding factor in blocking a rule, and its role in the rulemaking process should be vastly reduced — if not eliminated entirely.

Norfolk Southern’s toxic train wreck in Ohio is one of many painful and shameful consequences of that corruption. We fix it with stronger rules AND a better, more inclusive rulemaking process.

Lisa Gilbert is Public Citizen’s executive vice president. She has been named one of D.C.’s top lobbyists by The Hill and an under-40 rising star by Washington Life Magazine every year since 2017.