The Supreme Court decides the $4-$6 million in benefits do not outweigh the $9.6 billion annual costs of new regulations
The Supreme Court decided today in a 5-to-4 decision that the Environmental Protection Agency’s (EPA) proposed regulations regarding limits on the emission of mercury and other toxic pollutants from coal-fired power plants would place a financial burden on companies that outweighed its benefits.
The Clean Air Act requires that the EPA ensure that any regulations are “appropriate and necessary,” something the industry said the agency had failed to do when it did not take a cost-benefit analysis into account before proposing the regulations. The EPA responded that it was not required to make such an analysis when making the decision to regulate, but later in the regulatory process, when it was setting emissions standards, reports The New York Times.
According to industry estimates, the regulations would have imposed annual costs of $9.6 billion to achieve health benefits amounting to between $4 and $6 million, according to the Supreme Court majority opinion, authored by Justice Antonin Scalia. The EPA called this an unfair comparison, stating that the regulations would save 11,000 lives per year, and if the impact of all the hazardous pollutants were considered, the EPA claimed the regulations would translate into health benefits totaling between $37 and $90 billion per year.
The Supreme Court’s decision reversed an earlier ruling by the United States Court of Appeals for the District of Columbia Circuit, in which Judge Judith W. Rogers wrote that, “For EPA to focus its ‘appropriate and necessary’ determination on factors relating to public health hazards, and not industry’s objections that emission controls are costly, properly puts the horse before the cart.”
Justice Scalia, however, felt the EPA overstepped its authority by leaving out cost considerations when deciding to regulate mercury and other toxic pollutants from power plants. “EPA strayed far beyond [the bounds of reasonable interpretation] when it read [The Clean Air Act] to mean it could ignore cost when deciding whether to regulate power plants,” Scalia wrote in the majority opinion.