Supreme Court Strikes Down EPA Rule For Doing ‘More Harm Than Good’

REUTERS/Larry Downing

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Michael Bastasch DCNF Managing Editor
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After a string of disappointing Supreme Court rulings on social issues, conservatives are celebrating the court’s ruling against a major EPA rule forcing coal plants to shut down across the country.

In a 5 to 4 decision the Supreme Court ruled the EPA acted “unreasonably when it deemed cost irrelevant to the decision to regulate power plants” when crafting its Mercury Air Toxics Standard, or MATS, regulation improperly. The rule would limit mercury and other emissions from power plants at a cost of $9.6 billion a year to comply.

MATS had been challenged by the coal industry and 23 states who alleged the costs of the rule exceeded its benefits. Indeed, hundreds of coal-fired generators were being forced to close down because it was too costly to comply with MATS. The EPA and its environmental allies argued the rule would yield $36 billion in benefits — the court disagreed.

“No regulation is ‘appropriate’ if it does significantly more harm than good,” Justice Antonin Scalia wrote in the majority opinion.

“The Agency must consider cost—including, most importantly, cost of compliance—before deciding whether regulation is appropriate and necessary,” Scalia wrote. “We need not and do not hold that the law unambiguously required the Agency, when making this preliminary estimate, to conduct a formal cost-benefit analysis in which each advantage and disadvantage is assigned a monetary value.”

While this is a major legal win for the coal industry, it may have come too late. Power plant operators have already slated to retire 13 gigawatts of coal-fired power by the end of this year. Coal plant owners also must ready themselves to comply with upcoming ozone and greenhouse gas regulations.

Still, coal states were optimistic this decision will send a signal to the EPA — it has to consider the costs imposed on the economy for future environmental rules.

“I am thrilled that, for the second year in a row, the Supreme Court agreed with my Office’s argument that the EPA violated the Clean Air Act in imposing a costly regulation on the American people,” West Virginia Attorney General Patrick Morrisey, whose state was party to the suit against the EPA, said in a statement.

“The Supreme Court’s ruling today that the EPA has no authority to ignore the costs of its regulation will have far-reaching consequences for the agency’s many other overly expensive rules, including those it plans to enact as part of its effort to cripple West Virginia coal,” he said.

Conservative groups and the coal industry have long argued the EPA’s MATS rule would impose huge costs on the economy for little to no measurable benefit to public health.

“The Mercury and Air Toxics Standards was one of the most expensive rules ever promulgated, yet its benefits were illusory,” argued William Yeatman, a senior fellow at the free-market Competitive Enterprise Institute.

“In fact, the rule’s justification was to spend $10 billion annually in order to protect a putative population of pregnant subsidence fisherwomen, not one of whom EPA actually identified in the course of rendering the rule,” Yeatman added. “The court rightly found that the agency’s failure to weigh the rule’s costs against its benefits was unreasonable.”

The EPA and environmentalists argued limiting mercury emissions from coal plants was “especially dangerous to pregnant or breast-feeding mothers and young children,” according to The Washington Post, “and some of the savings are calculated as coming from preventing as many as 11,000 deaths and more than a half-million lost days of work.”

But free-market types say these arguments are misleading. Pat Michaels, a climate scientist and director of scientific studies at the libertarian Cato Institute, said the MATS rule would only yield public benefits “of 0.00209 I.Q. points (the margin for error is ~5000x this value) in a theoretical population of 240,000 people.”

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