Supreme Court decides against EPA on the Mercury and Air Toxics Standard

This week the Supreme Court ruled against the Environmental Protection Agency in Michigan v. EPA, a case concerning the Mercury and Air Toxics Standard (MATS Rule). The Court found that the EPA unreasonably decided not to consider the costs of implementing the rule. The decision has been called a blow to the Obama administration and a rebuke of the EPA. It certainly is a setback for public health and a victory for big polluters.

The EPA issued the MATS rule under authority from the Clean Air Act, which regulates a variety of air pollutants, including 189 “hazardous air pollutants.” When Congress amended the Clean Air Act in 1990, it directed EPA to study mercury emissions from electric utility steam generating units (power plants) and determine, based on that study, whether it was “appropriate and necessary” to regulate mercury emissions from power plants.

After conducting this study, the EPA issued the MATS Rule in 2011 (many years behind schedule). A lawsuit was immediately filed by industry and 21 states, including Texas, challenging the rule for not considering costs of implementation. While this lawsuit worked its way through the courts–and all the way to the Supreme Court–industry was required by law to begin implementing the rule. To the extent that the rule has been implemented, it has been an important step forward for public health. Mercury emissions from power plants are responsible for a variety of health effects, from asthma to premature death to autism.

But the rule was also very costly for industry to implement. EPA had estimated the rule would cost $9.6 billion per year to implement and bring $4 to $6 million a year in health benefits from hazardous air pollutant emissions reductions. The EPA also found that the rule would provide $37 to $90 billion a year in ancillary health benefits by reducing other pollutants such as particulate matter and sulfur dioxide. But EPA was not permitted to consider these ancillary benefits when deciding whether to issue the rule.

As a result, the EPA issued a rule whose costs were as much as 2,000 times its direct benefits. EPA decided not to consider these costs when it issued the rule. On Monday the Supreme Court found this decision unreasonable, halted the rule’s implementation, and sent it back to the D.C. District Court for reconsideration.

So what happens now?

First of all, all of the improvements to power plants that have already taken place under the MATS Rule will remain. Many plants converted to cleaner burning natural gas. Some of the oldest and dirtiest coal plants simply shut down. (Ultimately, Air Alliance Houston would like all coal plants to shut down, and any rule that gets us further to that goal is a good one.) The only plants that remain are ones that failed to implement the rule by April 2015, as they were required to, or sought an extension through next year. In other words, the plants impacted by the Supreme Court’s decision are precisely the slowest and worst acting ones.

Second, the EPA will have to redo the cost/benefit analysis and decide whether to alter the MATS Rule. In our opinion, this is a waste of time and resources. The EPA already found the full health benefits of the rule to be between $37 and $90 billion. If EPA could simply consider those full health benefits, the MATS Rule should make economic sense to anyone.

Finally, industry is likely to have a strong argument against immediate implementation of future EPA rules. The public already got most of the available benefits from the MATS Rule because it was immediately implemented. If future rules are held up while they work their way through the courts (and every big EPA rule is challenged by industry, Texas, and other states) the public will have to wait longer to enjoy their health benefits.

All of this is a disappointing turn of events. The EPA consistently finds that the public health benefits of its rules outweigh the costs. This has been true ever sense the Clean Air Act Amendments of 1990. It makes sense from both the economic and the public health perspective to continue to aggressively reduce air pollution from all sources. Not to do so prioritizes corporate profits over public health.

One more important point about this decision: it does not have an impact on the establishment of National Ambient Air Quality Standards for the so-called “criteria pollutants.” There are six of these criteria pollutants–ozone, particulate matter, carbon monoxide, nitrogen oxides, and lead–and EPA was explicitly forbidden by Congress from consider costs when establishing air quality standards for them. The State of Texas continues to argue that EPA should have considered costs when issuing the new ozone standard. That argument is as wrong after the Supreme Court’s decision as it was before.