The U.S. Supreme Court (SCOTUS) has set aside a far-reaching set of Environmental Protection Agency (EPA) regulations targeting mercury, arsenic, and acid gas emissions from coal-fired power plants.
SCOTUS’ June 26 decision was a rare judicial setback for the Obama administration’s policies targeting carbon dioxide emissions.
When EPA initially drafted the rule early in the Obama administration’s first term, it considered mercury emissions from coal-fired power plants as a “proxy” for carbon dioxide. After it became clear Congress would not pass cap-and-trade legislation to limit carbon dioxide emissions, the White House decided to act administratively to limit greenhouse gases.
Initially unsure whether it had the authority to limit carbon dioxide emissions directly under the Clean Air Act (CAA), the agency used the Mercury and Air Toxics Standards (MATS) in an attempt to limit them indirectly by limiting the emissions of toxics clearly covered under CAA.
By a five to four vote, SCOTUS ruled in Michigan v. EPA the agency should have taken into account the cost to utilities, consumers, and others before deciding to implement the regulation. EPA’s failure to conduct a cost-benefit analysis violated the CAA, the court ruled.
“EPA strayed well beyond the bounds of reasonable interpretation in concluding that cost is not a factor relevant to the appropriateness of regulating power plants,” the court wrote.
Neither ‘Rational’ nor ‘Appropriate’
The Clean Air Act requires regulations be “appropriate” and “necessary,” and a cost-benefit analysis is a traditional way to make such a determination.
Writing for the majority, Justice Antonin Scalia stated, “It is not rational, never mind ‘appropriate,’ to impose billions of dollars of economic costs in return for a few dollars in health or environmental benefits. Statutory context supports this reading.”
More than 20 states challenged EPA’s rule, as did several energy and mining companies.
The rule cannot go into effect until EPA decides whether it wants to conduct a cost-benefit analysis required under the Clean Air Act.
Impact on Utilities
EPA says the decision may have little bearing on the fate of the coal-fired power-plants.
“EPA is disappointed that the Court did not uphold the rule, but this rule was issued more than three years ago, investments have been made, and most plants are already well on their way to compliance,” said EPA spokeswoman Melissa Harrison in a statement.
Marita Noon, executive director of Energy Makes America Great, welcomed the Supreme Court’s decision.
“The absence of glee on the part of environmental groups shows the ruling was a plus for fossil fuels,” said Noon.
“Unfortunately, the decision comes too late to save the costs and jobs MATS inflicted on the industry and coal-dependent communities, but it does slow down EPA’s relentless push against the nation’s major source of energy, just as it reminds the public there are real costs to families and businesses in what Washington[, DC] is doing,” Noon said.
Bonner R. Cohen, Ph. D. ([email protected]) is a senior fellow at the National Center for Public Policy Research.
United States Supreme Court, Michigan, et al. v. Environmental Protection Agency, June 29, 2015: https://heartland.org/policy-documents/supreme-court-united-states-syllabus-michigan-et-al-v-environmental-protection-agen