Week in Review

IN THE NEWS

• Based on evidence that transmission of the coronavirus Omicron variant occurs “early in the course of illness,” the Centers for Disease Control and Prevention (CDC) has shortened the recommended isolation and quarantine periods for people with COVID-19. The CDC recommends that people with COVID-19 who are unvaccinated or received their second vaccine dose more than six months ago and have not received a booster should quarantine for five days and wear a mask for an additional five days. People with COVID-19 who have received the booster do not need to quarantine but should wear a mask for 10 days, according to the CDC. Given the recent spike in COVID-19 cases, CDC Director Rochelle Walensky urges the public to “get vaccinated, get boosted, wear a mask” and “take a test before you gather.”
• The U.S. Environmental Protection Agency (EPA) issued a final rule revising its greenhouse gas emissions standards for new vehicles made from 2023 to 2026. For 2025 and 2026 in particular, the rule sets “the most stringent standards ever set for the light-duty vehicle sector,” which includes passenger cars and light trucks. First proposed in response to President Joseph R. Biden’s executive order directing federal agencies to review past regulations, the new rule partially replaces emissions standards issued under the Trump Administration.
• The U.S. Food and Drug Administration (FDA) and the CDC approved Pfizer’s COVID-19 vaccine booster for 12 to 15 year olds, making all individuals over the age of 12 eligible for a booster after completing an initial two-shot series. The agencies also reduced the time between the initial shots and the booster from six months to five months, stressing the need to vaccinate the population fully against the Omicron variant.
• The United States Department of Justice issued a final rule that implements firearm storage requirements from the Gun Control Act. The new rule requires applicants for federal firearm dealer licenses to certify that they will have secure gun storage or safety devices, compatible with the firearms offered for sale, available when selling firearms to nonlicensed individuals. The rule also requires applicants for manufacturer or importer licenses to complete the certification if they plan to sell firearms to nonlicensees. The Bureau of Alcohol, Tobacco, Firearms and Explosives published a guide to help federal firearms licensees comply with the firearm laws and regulations.
• The Internal Revenue Service (IRS) and the U.S. Department of the Treasury issued new regulations explaining the potential tax consequences of moving away from interbank offered rates. An interbank offered rate is an interest rate used as a baseline in financial contracts, and the most widely used rate—the London Interbank Offered Rate, or LIBOR—ceased to exist at the end of 2021, forcing national regulators to coordinate with banks and transition to new base rates. As parties to complex contracts make this transition, the IRS and Treasury Department regulations offer guidance on how switching base rates could cause “realization of income, deduction, loss, or gain for federal tax income purposes.”
• The Office of Personnel Management issued a proposed rule rescinding portions of a November 2020 rule finalized under the Trump Administration. The 2020 rule streamlined the process for firing federal employees and required agencies to notify supervisors in their agencies at the three month and one month point prior to the expiration of every employees’ probationary period. Following President Biden’s January 2021 executive order, the Office of Personnel Management aims to rescind this rule, calling it “inconsistent with the current policy of the United States to protect, empower and rebuild the career federal workforce as well as its current policy to encourage employee organizing and collective bargaining.”
• The United Kingdom’s National Security and Investment Act (NSI) took effect on January 4. NSI allows the UK government to scrutinize and “intervene in certain acquisitions that could harm the UK’s national security.” Under NSI, acquirers of an entity with sufficient connection to the UK must provide notice to the government and receive approval prior to completing the acquisition. Business Secretary Kwasi Kwarteng described the process as “simple and quick, giving investors and firms the certainty they need to do business.” The UK Department for Business, Energy & Industrial Strategy published guidance to help investors and companies understand their new obligations under NIS.
• The New York Department of Labor issued a proposed rule outlining how the workplace safety committees created by the New York Health and Essential Rights (HERO) Act will be established, composed, and governed. State legislators designed the HERO Act to “protect employees against exposure and disease during a future airborne infectious disease outbreak.” The Act empowers employees to form workplace safety committees that can provide employers with input on safety and health issues.
• California’s State Water Resources Control Board adopted new regulations discouraging residents from overusing water in the middle of the state’s ongoing drought. The regulations include several prohibitions on using potable water, such as for washing sidewalks or overwatering lawns, except “to address an immediate health and safety need.” The new rules also shield property owners from homeowners’ associations seeking to enforce landscaping standards during the declared drought emergency. The Board’s chief deputy director, Eric Oppenheimer, reportedly described these regulations as “commonsense measures to save water as California faces more extreme cycles of wet and dry conditions driven by climate change.”

WHAT WE’RE READING

• In a recent Brookings Institution report, biophysicist Kevin W. Doxzen and professors Landry Signé and Diana M. Bowman of Arizona State University discussed how innovative regulation can advance precision medicine. Precision medicine uses a patient’s personal information, “such as DNA sequences, to prevent, diagnose, or treat disease.” Doxzen, Signé, and Bowman claimed precision medicine could transform treatment for late-stage cancer and rare genetic diseases, but noted several barriers to equitable delivery, including inefficient regulatory processes. According to Doxzen, Signé, and Bowman, governments that aim to integrate precision medicine into their healthcare systems should consider the “seven pillars of agile governance” that provide a “blueprint for regulators seeking to respond effectively and efficiently to technological innovation worldwide.” These pillars direct regulators to anticipate innovation and its implications, focus regulation on outcomes, create space for regulatory experimentation, use data to target interventions, leverage the private sector with industry-led governance mechanisms, and work across sectors, institutions, and international borders.
• In an article published in Land, researchers Yingkai Tang and Yunfan Yang of Sichuan University and He Xu of the Central University of Finance and Economics evaluated how China’s carbon emissions trading system (CETS)—which allows businesses to buy and sell emissions credits with the goal of reducing overall emissions—has affected the transition of local land use in the country. Tang, Yang, and Xu found that the CETS reduced overall economic output in some areas while also increasing energy efficiency, which the team took to indicate that former output was driven by “high-pollution industries” that were being pushed out by the CETS. At the same time, Tang, Yang, and Xu could not establish that the CETS caused “high quality economic development” by fully replacing previous growth from polluting sectors. They concluded that the CETS has effectively reduced carbon emissions across China even if emissions trading alone has not led to innovative growth.
• In a recent masters thesis, Kaja Koppang of Finland’s Aalto University showed how a European Union environmental information regulation (EIR) creating annual disclosure requirements of nonfinancial information affects small and medium businesses not subject to the regulation. Koppang explained that even though the EIR directly applies only to businesses with more than 500 employees, these larger businesses need to obtain non-financial information from smaller entities with which they do business in order to comply with the regulation’s requirements. Koppang documented how the EIR creates this “ripple effect” from Norwegian banks to smaller businesses in the supply chain, passing off some of the costs of compliance onto these smaller—supposedly excluded—businesses. If ignored, this expansion of the regulation’s effects threatens to squeeze smaller businesses out of any sustainable transition to a green economy, Koppang warned.

FLASHBACK FRIDAY

• In an essay in The Regulatory Review, Jack Lienke and Richard L. Revesz of the Institute for Policy Integrity at New York University School of Law argued that EPA’s attempt at replacing the Clean Power Plan represented a drastic about-face. Lienke and Revesz observed that the Trump Administration had played up the Obama-era regulations as “draconian” and a huge cost to the U.S. energy sector, but EPA’s final proposal justified a new plan by stating that no changes to emissions or health outcomes would have been achieved by the Clean Power Plan. Lienke and Revesz criticized EPA for attempting to obscure the effects of jettisoning the Clean Power Plan and engaging in less-than-clear regulatory analysis.