Fed Court Upholds EPA Reg That Costs 1,600 Times More Than It Yields In Benefits

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Michael Bastasch DCNF Managing Editor
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A federal appeals court upheld an Environmental Protection Agency regulation on mercury emissions from power plants despite the fact that the costs of the rule outweigh the benefits more than 1,600-1.

EPA’s Mercury and Air Toxics Standards, or MATS, has forced many coal-fired power plants to shut down because the upgrades it forces owners to make are too costly to economically justify keeping their doors open.

The Supreme Court ruled against MATS in June, but decided to leave the rule intact for a lower court to hash out. Now, the lower courts have upheld the controversial rule, citing the fact that the EPA is just five months from issuing a new mercury rule.

“While today’s unfortunate decision keeps the rule in place for now, EPA is not yet off the hook,” William Yeatman, a senior fellow at the free market Competitive Enterprise Institute, said in an emailed statement. “The agency still must perform a cost benefit analysis on the mercury rule, and this analysis will be subject to judicial review, which will be no cakewalk for the EPA.”

The EPA’s original MATS rule was projected to cost $10 billion a year and only yield $6 million in estimated benefits — a ratio of 1,666-1. MATS also resulted in the premature retirement of about 60 gigawatts of coal-fired power, costing jobs at the plant and the coal mines. The Supreme Court initially ruled against MATS because it failed to consider the high costs when crafting the regulation.

“No regulation is ‘appropriate’ if it does significantly more harm than good,” Supreme Court Justice Antonin Scalia wrote in the majority opinion, ruling on a lawsuit brought by 21 states and the coal industry.

EPA, however, estimated the benefits of clamping down on mercury emissions to be from $37 billion to $90 billion a year because it supposedly prevents 11,000 deaths, 4,700 heart attacks and yields other such health benefits.

“EPA is very pleased with the court’s decision to leave the Mercury and Air Toxics Standards (MATS) in place,” EPA spokeswoman Melissa Harrison told The Daily Caller News Foundation in an emailed statement.

“These practical and achievable standards are already cutting pollution from power plants that will save thousands of lives each year and prevent heart and asthma attacks,” Harrison said. “The standards also slash emissions of the neurotoxin mercury, which can impair children’s ability to learn. All told, for every dollar spent to make these cuts in emissions, the public is receiving up to $9 in health benefits. A majority of power plants have already installed and are operating the controls needed to meet MATS and the rest will be doing so in April 2016.”

But EPA’s analysis of the benefits of the rule are misleading since the agency only projects about $6 million directly from reducing mercury emissions — virtually all of the benefits of MATS come from reducing other pollutants. EPA has come under fire before for how it counts “co-benefits” in its regulatory assessments.

“These benefits are so miniscule because they are based on a population that almost assuredly doesn’t exist,” Yeatman said. “According to the EPA, the MATS rule is necessary in order to protect a supposed population of pregnant subsistence fisherwomen, who during their pregnancies eat hundreds of pounds of self-caught fish from America’s most polluted bodies of fresh inland water.”

“EPA’s has produced no evidence these voracious pregnant anglers actually exist; rather, they are modeled to exist,” Yeatman added. “I suggest these ‘victims’ don’t exist, and that the putative mercury benefits are much closer to zero. Although the courts afford agencies a great deal of discretion in their decision-making, EPA’s ridiculous cost benefits ratio for the mercury rule will strongly tempt rejection during judicial review.”

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