The Trump administration has prioritized the rollback of federal regulations, citing the costs they impose on businesses and citizens. It has required agencies to repeal ten existing regulations for every new one issued, directed automatic “sunset” expiration dates for thousands of rules, and instructed agencies to fast-track repeal by bypassing normal public-comment procedures.
A new article from Sydney Schoonover and W. Kip Viscusi at Vanderbilt Law School argues that this key priority of the administration, while possibly superficially appealing, is in many cases economically irrational and legally indefensible. They propose a better way to do it.
The Core Problem: Cutting Without Counting
“Smarter Deregulation,” forthcoming in the University of Illinois Law Review, contends that the administration’s deregulatory strategy focuses almost exclusively on reducing compliance costs while ignoring the benefits that regulations provide.
When a regulation is repealed, its benefits — cleaner air, fewer premature deaths, reduced hospital admissions, lower long-term climate costs, to name a few — do not simply disappear. They become foregone, creating real costs borne by real people.
“Deregulation per se does not guarantee cost savings,” the authors write. “When an agency repeals a regulation that provides net benefits, the effect of the repeal imposes net societal costs.”
The administration’s approach also runs afoul of decades of legal precedent. Under the Administrative Procedure Act, repealing a regulation is treated the same as creating one — agencies must go through public notice-and-comment procedures, conduct rigorous cost-benefit analysis, and provide reasoned explanations for their decisions. Courts have repeatedly struck down regulatory reversals that skip these steps or ignore countervailing evidence.
The paper further argues that several of the administration’s specific tools, specifically the 10-to-1 repeal mandate, automatic sunset provisions, and broad use of the “good cause” exemption to bypass public comment lack basis in statutes, ignores procedural hurdles, or stretch beyond legal boundaries, respectively.
A Smarter Framework
Schoonover and Viscusi propose the use of cost-benefit analysis itself to identify which regulations are the best candidates for repeal. Their three-part framework compares overall cost-effectiveness, a formulation that only considers the U.S. share of climate impacts, and a formulation that omits climate impacts entirely. Which deregulation efforts, if any, make sense depends on what benefits get counted and how large the benefits are.
To reduce the total cost burden of regulation, the regulations which deliver the least value per dollar of compliance cost should be targeted for elimination first. Those that are highly cost-effective, delivering large benefits relative to their costs, should be left alone. Regulations that are expensive relative to their benefits are the rational targets.
The authors suggest agencies calculate a benefit-to-cost ratio for each regulation within a category, rank them, and concentrate deregulatory efforts at the bottom of the list. “This approach is rational through its adherence to the analytical principles of cost-benefit analysis,” they write. “It is the most efficient method for achieving regulatory cost-savings.”
The Environmental Test Case
By applying their framework to environmental regulations — the primary focus of the current administration’s deregulatory agenda — the authors found that “many of the regulations under reconsideration by the administration are the costliest to rescind.”
Their paper identifies six environmental rules subject to deregulatory action under the Trump administration that concern greenhouse gas emissions, methane leak regulations, and fuel economy requirements. Using cost-benefit data from the agencies’ own regulatory filings, they find net benefits of more than $2.7 trillion across the six rules, with benefit-to-cost ratios ranging from almost 25 to 1 (New Source Performance Standards for Fossil Fuel-Fired Plants) to 2 to 1 (New Source Performance Standards for Stationary Combustion and Gas Turbines).
While the cost effectiveness of each rule decreases with the second and third formulations, all regulations save one maintain positive net benefits. The New Source Performance Standards for Fossil Fuel-Fired Power Plants—which the administration has proposed to repeal—is particularly net beneficial and cost-effective.
Applying the smarter deregulation framework to environmental regulations, the authors contend, “suggests that environmental deregulation is frequently unjustified and likely violative of legal standards requiring well-reasoned agency action.”
Smarter Deregulation Benefits Society and Reduces Legal Exposure
The authors note that deregulation is an appropriate regulatory measure in certain circumstances; rules can become outdated, technologies change, and some regulations may have been poorly designed from the start. The authors explicitly acknowledge that well-targeted deregulation can be beneficial, but if any agency’s goal is to achieve cost-effectiveness, it should take a well-reasoned approach that prioritizes societal well-being and reduces vulnerability to legal challenges.
“(Our) proposed approach to deregulation provides agencies with the flexibility necessary to respond to changed circumstances and to allocate limited resources while promoting transparent and rational agency decisionmaking,” they conclude.
“Smarter Deregulation” is forthcoming in the University of Illinois Law Review. Sydney Schoonover (JD/PhD ‘27) is a fifth-year student in the Ph.D. Program in Law and Economics at Vanderbilt Law. W. Kip Viscusi is the University Distinguished Professor of Law, Economics, and Management and Co-Director of the Ph.D. Program in Law and Economics at Vanderbilt Law.