Michigan v. EPA: Are Mercury Protections Worthwhile? We Know the Answer

Monday’s Supreme Court decision in Michigan v. EPA, siding with industry challengers to the Environmental Protection Agency’s Mercury and Air Toxics Standards, is bad news, for all the obvious reasons: the Standards save thousands of lives and prevent a host of illnesses, and protect children from the threat of life-long neurological damage. They are a tremendous bargain for the American public. Now, a five-Justice majority of the Supreme Court has asked EPA to supplement its decision with additional consideration of the costs to industry, acceding to Big Coal’s belief in the sanctity of its profits.

The Supreme Court did so even though EPA already considered industry’s costs. The Clean Air Act requires EPA to set standards that reflect, among other things, the costs of compliance; it directs EPA to set pollution limits based on the reductions being achieved by well controlled, currently operating power plants. By directing the Agency’s attention to the pollution-reductions already being achieved by similar plants, the Act compels EPA to adhere to a real-word, evidence-based approach to costs, ensuring cost-effectiveness while limiting the agency’s – and the public’s – vulnerability to the political muscle of industrial polluters. As Justice Kagan’s dissent painstakingly explains, by following that statutorily prescribed process, EPA “develop[ed] a realistic and cost-effective regulation.” (p.17) The majority opinion, insofar as it bothers to acknowledge the substance of EPA’s rulemaking at all, says that by following the statutory scheme, EPA considered cost only “in limited ways,” and did not give cost sufficient “influence” in the “regulatory process.” (p.13-14). But that’s a quarrel with the statute – with ‘limits’ enacted specifically to limit industry’s ‘influence’ in the ‘regulatory process.’ And under the normal rules of deference, the statute (and if the statute is ambiguous, the Agency’s interpretation of it) should trump the Court’s policy preferences. (Remember last Friday, when Justice Scalia was overwrought at the possibility that “a bare majority of the Court” would answer a “policy question” properly left to the elected branches?)

That’s disappointing – but no reason for despair. While EPA will have to return yet again to its determination that it is “appropriate and necessary” to regulate coal- and oil-fired power plants’ toxic emissions – this time with an eye towards industry’s costs, the Court’s decision offers little reason to doubt the outcome of that administrative process: the Standards are massively beneficial, and no reasonable consideration of costs is going to justify their withdrawal. Justice Scalia’s opinion does not question the substance of EPA’s costs assessment: that the “quantifiable benefits of [the Mercury] regulations” to the public’s health are “$37 to $90 billion per year,” as against costs to industry of about “$9.6 billion” (p.4). It accepts that lower estimates of the Standards’ benefits, relied upon heavily by the challengers, reflect only EPA’s inability to “fully quantify the benefits of reducing power plants’ emissions of hazardous air pollutants.” Id. (That inability is hardly surprising; how would you place a dollar-figure on the value of a child’s intelligence – the hazards to which were a primary driver of EPA’s decision to regulate power plants?). The majority recognizes that it is “up to the Agency to decide...how to account for” these unquantifiable costs; EPA need not conduct “a formal cost-benefit analysis in which each advantage and disadvantage is assigned a monetary value.” (p.14)

When EPA conducts its costs-assessment, consequently, the only plausible result should be prompt re-issuance of the Standards, accompanied by a firm (if redundant) confirmation that their costs are entirely reasonable. Coal-fired power plants are responsible for the vast majority of mercury, arsenic, and other similar pollution in the United States. Those toxics pose the gravest imaginable risks. Protecting the public from these risks is well worth the Standards’ moderate costs, and even Big Coal’s most expensive lobbyists shouldn’t be able to convince EPA otherwise.  

A second silver lining: coal-fired power plants may not even secure a delay in complying with the Standards. The Supreme Court’s decision didn’t take EPA’s rule off the books; it left it to the Court of Appeals for the D.C. Circuit to decide whether they will remain in force, or not, while EPA completes its new ‘appropriate and necessary’ determination. (p.15) Until the D.C. Circuit says otherwise, the Standards are still in effect.

The Circuit will have scant reason to suspend the Standards while EPA assembles a cost analysis. Power plants were required to comply with the Standards last April – though some secured a one-year extension, most plants have installed the necessary controls (without, one might add, any noticeable dent in the fortunes of the utility industry, which has been steadily adding jobs even as the Standards have gone into effect). Invalidating the Standards now would spare industry only the expense of switching the controls on, while imposing a massive burden on the public’s health. It’s hard to see why the D.C. Circuit would sanction that result, especially when EPA has such a straightforward path to establish the Standards’ cost-effectiveness (and, indeed, already has).

So in the end, the Court may not have dealt a significant blow to public health, or granted much of a boon to polluters.

What may be most discouraging about Michigan is the suggestion – embraced, at times, even by the dissenting opinion – that it is EPA’s job (and the courts’) to  “ensure cost-effectiveness” whenever the Agency applies the requirements of the Clean Air Act. (p.13-14) When it authored that Act, Congress made a fundamental judgment: that ensuring our children’s health and safety, and our own, is a national goal of the utmost value. Congress understood the difficulty – indeed, impossibility – of reducing that value to a monetary figure. A child’s ability to breathe unaided, or her intellectual capacity, is not properly analogized to a sports car or a toaster; its worth is not accurately measurable in dollars and cents.

The trade-off between the value of public health and costs is, in other words, a value judgment – one that isn’t amenable to the sort of technical number-crunching in which EPA and its fellow agencies specialize. Congress made that judgment, in the Clean Air Act, by prescribing what harms the Agency should eliminate, and what burden polluters should bear to accomplish the necessary reductions. The Court’s decision in Michigan invites the Agency (and the judiciary) to second-guess that statutory balance – to decide, despite Congress’ manifest determination to the contrary, that the costs of modern pollution controls outweigh the benefits of protecting us from mental disability, cancer, and asthma and other respiratory diseases. For these particular Mercury and Air Toxics Standards, it’s unlikely to make a difference. But one hopes that in future cases, the Court recalls that the Clean Air Act embodies Congress’ sound judgment that the benefits of achieving clean, healthy air are worth the cost.