Twenty-five years in the making, the Environmental Protection Agency’s regulations to reduce emissions of mercury and other hazardous air pollutants (HAPS) from power plants recently ran aground in the Supreme Court. As discussed in this blog site last week, (see here and here,) the majority opinion by Justice Scalia in Michigan v. EPAheld that EPA erred in failing to consider cost when it made the threshold statutory finding that listing of power plants for regulation was “appropriate” under a special provision for power plants in the hazardous pollutant sections of the Clean Air Act.
The dissenters, in an opinion by Justice Kagan, disagreed that costs had to be considered at the initial listing stage. She contended that costs were properly addressed when specific standards and requirements were developed for various source categories in the course of the normal rulemaking process, and emphasized that a final cost-benefit analysis was conducted to evaluate and support the decisions made.
Although Justice Scalia was at pains to say that the Court was not specifying the details of the cost analysis required, the majority was plainly troubled by the agency’s findings that the benefits of the mercury controls alone were valued at an annual value of only $4-6 million compared to an annual cost of $9.6 billion. However, mercury was not the only HAP controlled by the rule, and the co-benefits of incidental removal of other toxic fine particulate pollutants were estimated at $36-90 billion in EPA’s cost-benefit analysis. Those big numbers reflect robust scientific evidence of the incidence of illness and death caused by particulate emissions.
The majority did not address whether such co-benefits could be relied upon in a determination that the cost of the power plant rules was “appropriate.“ The D.C. Circuit will have to define the terms of EPA’s redo of the cost analysis. We are likely to hear more about counting of co-benefits in cost benefit comparisons, an issue also presented in EPA’s proposed Clean Power Rule for power plant greenhouse gas emissions. Reducing carbon emissions also reduces particulate emissions even more, and the monetized benefits of that effect exceed the harder to estimate benefits achieved in slowing global warming.
Public Health and Environmental Consequences of the Decision
Despite the Supreme Court’s action, commentators on both sides of the issues agree that major benefits of the regulation will not be lost. A trade publication estimated in May that half of the power plants subject to the rule have already installed the required emission control technology to meet multiple EPA air pollution rules, in addition to the hazardous pollutant rule. Another 200 plants given an extra year to comply are installing and testing equipment. Several dozen plants accounting for only 1% of industry capacity reportedly are the remaining uncontrolled sources that will continue to operate without controls or plans to install them until the Michigan case is concluded.
Many companies that have complied with the rules are doubtless disappointed to see the perennial “free riders” get another reprieve; some intervened on EPA’s side in the Michigan case to complain about unfair competition from uncontrolled plants. But the majority of power plants, to their credit, are already delivering the public health and environmental benefits of the rule for the community.
Citizens unhappy with the continuing failure to regulate old coal plants may wish to support the divestment movement, recently joined by Georgetown University, in dumping coal company securities. The day Michigan v. EPA was decided, the stock of three major coal producers rose about 10%. If the price jump holds, now looks like a good time to sell.