Economic Benefits of Improved Infrastructure Permitting

The National Environmental Policy Act (NEPA) turned 50 years old in 2020. The law was put in place to inform decision making, but over the years, complying with the regulatory requirements has become unnecessarily complex and time consuming and has delayed important infrastructure projects.

NEPA requires that Federal agencies evaluate the potential environmental impacts of major projects such as roads and bridges, rail and water infrastructure, or conventional and renewable energy projects. Given the importance of infrastructure investment to economic growth, President Trump directed the Council on Environmental Quality (CEQ) to modernize the Federal government’s NEPA regulations. This week, CEQ issued a notice of proposed rulemaking detailing its modernization plans.

CEQ’s proposal is the first comprehensive update to the regulations that implement the NEPA law in over 40 years, and evidence demonstrates these changes are sorely needed. According to CEQ data, completing the average environmental impact statement (EIS) process takes 4.5 years. The delay is worse for highway projects in particular, with many statements taking over 6 years and some reviews taking decades.

Greater infrastructure investment brings broad benefits, including reduced commute times, fewer accidents, more efficient and profitable firms, and greater employment. CEA’s 2018 paper on infrastructure investment explains why the cost of excessive delays to infrastructure investment are high. A study by the American Society of Civil Engineers estimates that failure to properly maintain the nation’s infrastructure is holding back the creation of hundreds of thousands of jobs and reducing annual incomes by $3,400 per household.

NEPA modernization will reduce the average time to complete an EIS in part through increased interagency coordination within the Federal government. Project sponsors must often acquire approval from various agencies on permitting decisions in order to advance their project. NEPA serves as the umbrella statute for coordinating environmental reviews. In the past, reviews for projects involving multiple permits were conducted sequentially instead of concurrently and in some cases there was insufficient coordination among agencies. CEQ’s proposed NEPA updates includes codifying aspects of President Trump’s One Federal Decision policy, which improves coordination and communication between Federal agencies and sets a two-year average goal for completion of environmental reviews for major infrastructure projects.

And as with implementation of the One Federal Decision policy and other steps agencies have taken in the past three years to streamline permitting, these proposed new rules are administrative improvements to the process. The Federal government will still perform all environmental reviews as the law requires, just now with greater efficiency.

Modernizing NEPA to realize the benefits of improved infrastructure follows the Trump Administration’s commitment to regulatory reform, which includes greater transparency, improved benefit-cost accounting, and deregulation. As President Trump said in a message on NEPA’s anniversary, “While the goals of NEPA remain the same as they did 50 years ago, the environmental review process designed to improve decision making has become increasingly complex and difficult to navigate.”

Given the high costs of excessive permitting delays, and the importance of improved infrastructure for economic growth, there is much reason to expect that NEPA modernization will improve the American economy, American lives, and public safety.

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