About that EPA ruling … it’s not what you have read in the paper

The Rush Limbaugh of The Republic, Doug MacEachern, once again misinforms and misleads readers of The Republic with his opinion today. Justice Kagan wrong about EPA and costs. Rush Doug takes exception to Justice Elena Kagan’s comment in her dissent:

That is a peculiarly blinkered way for a court to assess the lawfulness of an agency’s rulemaking. I agree with the majority — let there be no doubt about this — that EPA’s power plant regulation would be unreasonable if ‘[t]he Agency gave cost no thought at all.’ … But that is just not what happened here. Over more than a decade, EPA took costs into account at multiple stages and through multiple means as it set emissions limits for power plants. And when making its initial ‘appropriate and necessary’ finding, EPA knew it would do exactly that — knew it would thoroughly consider the cost-effectiveness of emissions standards later on. That context matters.

This has been long-standing practice in environmental regulation, previously upheld by the U.S. Supreme Court. This is why the Court of Appeals for the District of Columbia, which oversees federal regulatory cases, upheld the EPA regulations — the EPA had followed established practice. Scalia’s opinion in Michigan v. EPA marks a departure from prior Supreme Court precedents.

Lyle Denniston at SCOTUSblog provides an Opinion analysis: Power plants stymie smokestack controls:

When Congress orders an agency to begin regulating an industry, but says it should do so only if “appropriate and necessary,” the agency must take costs into account before it issues any orders, according to the ruling in a group of cases under the name Michigan v. Environmental Protection Agency.

The decision, written by Justice Antonin Scalia, at least temporarily blocked a ruling by the EPA that it would go ahead and regulate power plants while delaying, until it actually issued specific controls to specific plants, any review of how much it would cost to abide by regulation.  Scalia said the agency did not have to follow any particular method of gauging the costs, but it had to fashion some way to calculate that prior to doing any regulating.

Congress chose, in a revision of the Clean Air Act, to treat power plants as a special group, and it told the EPA to regulate their hazardous emissions only if the agency found that it was “appropriate and necessary” to do so.  The EPA interpreted that mandate to mean that it was to take into account, at the outset, only whether regulation of the plants’ emissions was necessary to protect public health and safety.   It would (and did) look at costs at a later stage, when calculating just what controls to impose on any given facility.

The EPA approach was challenged by two dozen states and by trade groups representing the electric generating industry and coal mining.  They argued that the cost factor was so crucial that it had to be weighed before any regulation, at all, was undertaken.  The agency’s decision to go ahead with a regulatory program for power plants had been upheld by the U.S. Court of Appeals for the District of Columbia Circuit.

The Court majority accepted the challengers’ argument that EPA regulation of hazardous emissions from the power plants would cost nearly $10 billion but would only result in benefits measured at only about $4 million to $6 million per year.  That, Justice Scalia wrote, emphasized the vital role that costs were to play in the regulatory decision.

While Scalia conceded that the EPA might be able to show that regulating the power plants’ smokestack emissions would have benefits other than reducing mercury pollution, thus showing additional benefits when health and safety were given cost valuations, he said that was not an issue at this point.  The only question, he wrote, was whether the EPA was wrong in refusing to make the cost-benefit analysis upfront, before starting any regulatory program.

* * *

Justice Kagan wrote that the EPA has actually examined the costs of regulating power plants over and over again, and was being faulted for not doing so at a very early stage in the process.

Exactly right! Justice Kagan’s Blistering Response To The Supreme Court’s Ruling On Mercury Pollution:

Kagan said the EPA didn’t consider costs in the first stage of the regulatory process because it knew that it would have a chance to consider costs later on.

“[T]he Agency, when making its ‘appropriate and necessary’ finding, did not decline to consider costs as part of the regulatory process,” she wrote. “Rather, it declined to consider costs at a single stage of that process, knowing that they would come in later on.”

* * *

Moreover, Kagan argued, the EPA made a decision to regulate mercury emissions from power plants before it designed those emission standards, making it impossible to calculate potential costs associated with standards that hadn’t even been created yet.

“Simply put,” Kagan wrote, “calculating costs before starting to write a regulation would put the cart before the horse.”

Scalia’s opinion does not “strike down” the EPA regulations, despite what you have heard or read in the media. The Court is remanding this case for further proceedings. The EPA has the opportunity to make its case under this ruling in the lower court. What Everyone Is Getting Wrong About The Supreme Court’s Mercury Pollution Ruling:

Despite reports to the contrary in the New York Times, the Wall Street Journal, and briefly this publication, the Supreme Court didn’t actually “strike down” the EPA’s regulations of toxic air pollution from power plants on Monday.

What the Supreme Court did do was put the regulation — which limits toxic heavy metal pollution like mercury from coal and oil-fired plants — in jeopardy. In a 5-4 decision led by Justice Antonin Scalia, the court said the EPA acted unlawfully when it failed to consider how much the regulation would cost the power industry before deciding to craft the rule.

However, that doesn’t mean the rule is gone. In fact, it’s still in place at this very moment. Right now, power plants are still required to limit their emissions of mercury, arsenic, chromium, and other toxins. A spokesperson for the EPA confirmed this to ThinkProgress.

What the Supreme Court’s ruling does is send the current mercury rule to the D.C. Circuit court for further consideration. The D.C. Circuit could very well invalidate the rule. But it could also uphold it, if the court finds more harm than good would be done by repealing it, or if the agency can offer a reasonable explanation of why costs weren’t included early on in the administrative record.

The D.C. Circuit has often left rules in place under similar circumstances, according to Jim Pew, an attorney at Earthjustice who worked on the case.

“It’s a narrow decision, that’s a really important point,” Pew told ThinkProgress by phone on Monday. “It leaves the rule in place. It doesn’t throw it out. And it leaves EPA with a lot of discretion.”

Pew said the ruling was actually not as bad as it could have been for environmental advocates. For one, the Supreme Court could have just thrown out the entire thing. It also could have doubted the EPA’s calculation of the benefits of limiting mercury and other toxic pollution, which include the prevention of 11,000 premature deaths every year and annual monetized benefits of between $37 billion and $90 billion.

The Supreme Court could have also said definitively that regulations on mercury emissions from power plants are too expensive, and that the costs outweigh the benefits. The court did not say that — it just said the EPA must consider cost at the very beginning of the regulatory process.

“[Scalia] just thought it was extreme that EPA interpreted that it could ignore costs altogether,” Pew said.

The EPA did not ignore monetary concerns entirely when it crafted the mercury rule. While it’s true that the EPA did not consider costs when it initially decided to issue a regulation on heavy metal emissions, the agency did evaluate how much the rule would cost the power industry later, when it decided what the regulation would actually be.

At its core, Monday’s ruling just says that consideration must come earlier in the process. And while Scalia’s ruling hinted that he thought the rule was too expensive to be justified, the effect of the ruling says nothing of the sort.

“[The ruling] said EPA had to consider costs, but it’s not saying anything about how EPA is supposed to consider costs and whether that particular decision would be right or wrong,” Pew said.

Another reason environmentalists might breathe at least a small sigh of relief is that many of the requirements set by the mercury regulations are already in place. A big chunk of power plants were forced to be in compliance with the rule back in April, meaning many power plants already have their emissions control systems installed. Of course, if the ruling is eventually invalidated, those plants could just turn those systems off if they really wanted to.