Environmental Protection Agency

In Mercury Case, Supreme Court Rules That the EPA Must Take Costs and Benefits Into Account

No regulation is "appropriate" if it does significantly more harm than good, argues majority opinion.

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MercuryFish
womenshealth

The Environmental Protection Agency imposed regulations on coal-fired plants with goal of reducing the amount of mercury they emit into the air. One problem is that mercury from the powerplants ends up in streams, lakes, and estauries where it bioaccumlates in fish that people eventually eat. The EPA set a reference dose for methylmercury in fish at 0.3 parts per million.The amount of mercury being emitted into the environment as been already fallen by more than 60 percent, largely because mercury containing products have been diverted from incinerators.

The new rules were challenged by 23 states and a variety of electric power generation companies that argued that the regulations cost way more than the benefits they offered. Today, the Supreme Court in a 5-to-4 decision in Michigan v. Environmental Protection Agency determined that the EPA must take both costs and benefits into account when devising regulations. From the decision:

The Agency may regulate power plants under this program only if it concludes that "regulation is appropriate and necessary" after studying hazards to public health posed by power-plant emissions. §7412(n)(1)(A). Here, EPA found power-plant regulation "appropriate" because the plants' emissions pose risks to public health and the environment and because controls capable of reducing these emissions were available. It found regulation "necessary" because the imposition of other Clean Air Act requirements did not eliminate those risks. The Agency refused to consider cost when making its decision. It estimated, however, that the cost of its regulations to power plants would be $9.6 billion a year, but the quantifiable benefits from the resulting reduction in hazardous-air-pollutant emissions would be $4 to $6 million a year. … 

The costs to power plants were thus between 1,600 and 2,400 times as great as the quantifiable benefits from reduced emissions of hazardous air pollutants. …

..the phrase "appropriate and necessary" requires at least some attention to cost. One would not say that it is even rational, never mind "appropriate," to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits. In addition, "cost" includes more than the expense of complying with regulations; any disadvantage could be termed a cost. EPA's interpretation precludes the Agency from considering any type of cost—including, for instance, harms that regulation might do to human health or the environment. The Government concedes that if the Agency were to find that emissions from power plants do damage to human health, but that the technologies needed to eliminate these emissions do even more damage to human health, it would still deem regulation appropriate. See Tr. of Oral Arg. 70. No regulation is "appropriate" if it does significantly more harm than good.

Just how finely balanced the benefits and costs of reducing exposure to mercury in fish are is illustrated by a 2012 study in Environmental Science and Technology. That study found that the cognitive benefits to infants from reduced consumption of contaminated fish would be offset by the costs of cardiovascular disease in older people who no longer were exposed to heart-healthy fish fats.

This is not the end of the case. The decision allows the agency to go back to the drawing board and gin up, ah, I mean, develop a more extensive analysis of the costs and benefits of regulating mercury emissions. Given the intellectual flexibility of regulatory science, the EPA will no doubt soon find that the benefits of regulating power plant mercury emissions far outweigh the costs.

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63 responses to “In Mercury Case, Supreme Court Rules That the EPA Must Take Costs and Benefits Into Account

  1. Worst Lobstergirl cover band ever.

  2. Sort of like when Bjorn Lomborg tells the Pope that “The climate policies of today will do little for the poor.”

    It would be nice to see more of ye olden “Cost/benefit analysis” when it comes to Environmental policies. California could sure use some of that right now.

    1. Statistics, lots of statistics…..

    2. yeah, something about a iddy biddy widdow go-fish shutting down 30,000 farms in Central Califoraia……

  3. I wonder what mercury tastes like…

    Seriously, how can they seem to make sense one time and NOT make sense all the time?!

    1. Wonderful with tuna.

    2. break one of those squiggly new fluorescent light bulbs and find out. I’va long found it quite distubing that with one fist EPA impose billions of dollars in cost of dubious resulting value in coal generation limits, and with the other hand mandate we all use those wretched new EPA Approved bulbs….. that don’t last as long as the old incandescent bulbs, have other issues… and are filled with mercury vapour to make them work. I’ve read of such a bulb falling on the floor in a home, breaking, and when the Mum calls poison control (bad idea anyway, but she’s naif enough to trust government) to ask what to do, they send a full on EPA approved cleanup crew, toss everyone out of the house, spend $6,000 on the cleanup (by the time they got there all the mercury had turned to vapour anyway, but hey, they needed the work so why not make a federal case out of the crisis?

      Hi, we’re from the gummint and we’re here to help…… ourselves to your bank account.

  4. Of course it was a 5-4 decision. The leftwing justices are pure statists when it comes to economics.

    1. They are pure statists period. When is the last time you had any doubt as to which way the four liberal judges will vote?

      1. is it statist to allow gay marriage? *grabs popcorn*

        1. Yes, if they make it compulsory for businesses and churches to serve gay weddings.

          No, if it’s simply about the government contract.

          It’s a matter of time before they will have to rule on this.

        2. It doesn’t have to be, but let’s assume that this is the intent — the church represents one of the few remaining threats to totalitarian statism in our society (along with the gun-owning class), so it has to be stripped of moral authority and hobbled institutionally.

          Gay marriage provides an excuse for financially advantaging churches that are willing to operate as mouthpieces for the state above those that resist it in favor their own doctrines, and it makes such discrimination sound noble to the useful idiots on socialist media, rather than power-hungry and mendacious.

        3. when they have NO AUTHORITY uner the Constitution to deal with the issue, yes it is statist. When they are excluded jurisdiction over such a case by the Constitution, yes it is statist.

      2. Sotomayor will defend the 4th Amendment

        1. And Thomas will gut it.

          We have to do a cost-benefit on the Supes.

      3. When is the last time you had any doubt as to which way the four liberal judges will vote?

        Sometimes, for some civil liberties (freedom of expression, occasionally on due process), they will vote against the State.

        But, that’s about it.

    2. It seems like a tenet of leftism that costs never matter, so cost/benefit analysis is never needed. In fact, cost/benefit analysis is a bad thing because it interferes with intentions.

      1. Well, if it there are costs, only the wrong sorts of people will be paying them anyway so there is no down side.

        1. And, conversely, if the opposing position has benefits, only the wrong sorts of people will reap them.

      2. And social signalling.

      3. Lefties can’t do cost-benefit analyses because they only recognize the benefits of their own policies and the costs of the alternatives. So naturally everything they do feels right!

      4. To progressives cost/benefit analysis is a bad thing because crass concerns like filthy money should never carry any weight at all against the priceless intrinsic value of three seconds of a single human life. it’s immoral to even consider it.

        The purity of nature is an absolute good, and money is an absolute evil and so doing cost-benefit analysis is like taking -(infinity+sin)/infinity. All answers are inherently immoral.

        1. Actually, progressives usually place animal life above human life.

          A quote from a progressive I used to work with:
          “They have just as much right to live as you do.”

          She was referring to dogs.

  5. From the events of the recent wekk, a liberal would believe the Supreme Court loves gay people and wants to kill children, although a child’s stint in the hospital will be covered.

    1. But their lunch will be raisin-free.

  6. If they can measure it, then it’s too much. Duh.

  7. First the reinstating of confederate apps, now THIS?!?!?

    What is it, opposite day?

  8. Per Kagan’s dissent:

    EPA conducted a formal cost-benefit study which found that the quantifiable benefits of its regulation would exceed the costs up to nine times over?by as much as $80 billion each year.

    This seems more a conflict of fact. What did the CBA determine to be the net effect of this regulation?

    1. Yeah, which leads to Bailey’s last, beautiful paragraph:

      “This is not the end of the case. The decision allows the agency to go back to the drawing board and gin up, ah, I mean, develop a more extensive analysis of the costs and benefits of regulating mercury emissions. Given the intellectual flexibility of regulatory science, the EPA will no doubt soon find that the benefits of regulating power plant mercury emissions far outweigh the costs.”

      1. Requiring a cost-benefit analysis is only a limitation if people bother to make sure it’s accurate.

        1. Ding.

          Ding.

          Unless there is some ability to put the analysis in front of a neutral arbiter, its pure eyewash.

          1. So now we’re going to have scientific courts?
            This should be fun…

            1. Logic would say that scientific courts would be better than what we’ve got now.
              Experience says not so fast.

      2. I would go a step further and argue that all of the ‘benefits’ are purely speculative. The EPA just makes shit up in ridiculous models. And no government agency is going to come up with anything better.

        Government estimates of costs and benefits are always off. Even when they may actually be trying to be honest, they grossly underestimate costs and inflate benefits.

        1. How would they get any funding approved if the costs outweighed the benefits?

          If gov’t estimates of cost/benefit were accurate, there would be very little for gov’t to do.

      3. “intellectual flexibility” is a nice term of art.

  9. So, aside from the ACA ruling, it’s been a pretty good week for libertarians. Especially on regulation and takings.

    1. You mean the ACA ruling that said IRS had to allow those income tax credits? And that the IRS didn’t deserve deference in general when it came to interpreting statutes beyond IRS’s area of expertise?

      1. It’s never a good thing for libertarians what the tax code gets more complex or more people get selective tax credits. Taxes should be uniform across the board. They shouldn’t be covert subsidies or incentives to behave in a politically favored manner.

        Agree it’s a plus that the IRS doesn’t deserve deference in general. They still got it this time though.

        1. Not that I can see, they didn’t. The court ruled that Congress meant a certain meaning, & that IRS couldn’t alter it. It happened to be the same meaning IRS wanted in this case, though, but that’s not deference, that’s just agreement.

      2. Yeah, the one that set aside the clear text of the law to the court could make it into something it isn’t. That’s the real issue.

  10. Great, the same entity whose projections of medicare costs and budgetary surpluses/deficits turned out to be absolutely laughable now needs to model opportunity costs? I have full faith and confidence that this task is left in the capable hands of government bureaucrats.

  11. It’s a good start, but I won’t be happy until they term all regulatory burdens a taking and compel regulators to reimburse the people they regulate for their time and expense.

  12. The underlying premise here is that we are responsible for the mercury in the environment.

    Fresh water critters and plants concentrate heavy metals. Gold prospectors used to cut cattails and hold the cut ends up in the sun to see if there was gold in the stream. If there is you can see gold flakes in the stalk.

    In one of my quantitative analysis labs we looked into this. We took a bass that was mounted on a board 250 years ago and checked it for mercury. It had exactly the same amount of mercury as the fish we caught the day before.

    Of course, this is Louisiana. We have the biggest deposit of Uranium in the world here and it is right up on the surface in places.

    1. Louisana is fun in small quantities. I’ve had a few hurricanes from Pat O’Briens. Sheeeet, those’ll kill ya quicker than some mercury-laden bass.

  13. Mercury? You mean Vitamin M? Python is a valuable source of that important nutrient.

  14. the EPA must take both costs and benefits into account when devising regulations.

    That’s not the ruling. EPA now has to take costs into account when deciding to regulate at all,while they wanted to defer cost analysis until they were deciding the terms of the regulation. Heck, one of the first lines of the dissent is that a rule developed without looking at costs would be blatantly illegal.

  15. “EPA must take both costs and benefits into account when devising regulations”

    While the headline is actually worth celebrating, what is so depressing about this is that

    a) the government has ever argued that they shouldn’t; or that the notion of “cost/benefit analysis” is so unbelievably foreign to regulators

    and

    b) in the end, the analysis of costs and benefits will still be engineered by EPA (or as ron put it, “Ginned Up”) for their own purposes. All it will mean is a new department of Statistical Obfuscation in EPA for the purpose of cherry picking risks, and understating costs.

    I know, horribly cynical of me. I still appreciate the court kicking them to the curb… its just that I know that that they will still get their way AND enlarge their bureaucratic footprint in the process. Because its just too easy to whip together these bullshit ‘analyses’ and use it for de-facto justification.

  16. So, basically, our model is:

    1. EPA goes for whatever regulations it wants
    2. If you think it doesn’t make sense from a cost/benefit analysis, appeal to SCOTUS

    That’s efficient, from a cost-benefit analysis.

  17. “The decision allows the agency to go back to the drawing board and gin up, ah, I mean, develop a more extensive analysis of the costs and benefits of regulating mercury emissions. Given the intellectual flexibility of regulatory science, the EPA will no doubt soon find that the benefits of regulating power plant mercury emissions far outweigh the costs.”

    Actually, they already use a different method: Flat-out lying about what is in their own economic impact studies. A watchdog office at another federal agency, the Small Business Administration, has pointed to at least four occasions of this since 2009: http://www.washingtonexaminer……le/2554859

  18. Sorry, could you explain again from a libertarian perspective why I shouldn’t have the right to just flat out shoot anyone who is threatening to put mercury in air that I may have to breathe? That sounds like a classic 2nd Amendment, self defense scenario to me.

    1. Re: Egypt Steve,

      Sorry, could you explain again from a libertarian perspective why I shouldn’t have the right to just flat out shoot anyone who is threatening to put mercury in air that I may have to breathe?

      Because people would simply shoot back at you for being a deranged, paranoid wacko.

    2. Because trace amounts of elemental or oxidized mercury is not at all dangerous to breathe?

      1. Precautionary Principle!!! You can’t be sure!!!

  19. The Agency refused to consider cost when making its decision. It estimated, however, that the cost of its regulations to power plants would be $9.6 billion a year, but the quantifiable benefits from the resulting reduction in hazardous-air-pollutant emissions would be $4 to $6 million a year.

    We have to spend serious cash to make pennies!

    ? “The EPA has to impose these regulations on mercury emissions because the market is not quantifying the externalities which are the costs to our environment and our health.”

    ? “Ok, but have you determined the costs these regulations will have on the economy?”

    ? “What? How can you put a price on clean air, you barbarian?”

    ?”But you just… Oh, never mind.”

  20. Cost-Benefit Analysis…..
    Oh, the Horrors.

    Well, that will add another 5-10 years of litigation to every issue.

    “Won’t someone rid me of these meddlesome priests?”

  21. I know Reason is all about dissenting opinions when they come from Scalia, but on this case Kagan had a good one. She explains that EPA took costs into account except at the first phase, because the regulation had not been written yet, so it didn’t know then what the costs would be.

    1. Regardless, she says this

      “Costs matter in regulation. But when Congress does not say how to take costs into account, agencies have broad discretion to make that judgment. Accord, ante, at 14 (noting that it is “up to the Agency to decide (as always, within the limits of reasonable interpretation) how to account for cost”). Far more than courts, agencies have the expertise and experience necessary to design regula- tory processes suited to “a technical and complex arena.” Chevron, 467 U. S., at 863. And in any event, Congress has entrusted such matters to them, not to us.”

      So, EPA was doing what Congress asked for, and the Court was now assuming that responsibility. Judicial overreach. Judicial activism. Blurring the checks and balances line.

      Or did that only happen with the Obamacare ruling?

      1. So, you believe in the precautionary principle, except when it comes to potential limitless expense for useless legislation?

        What you cited is basically an idiotic combination of Argumentum ad Ignorantiam and “Top Men will Figure Things Out”.

        1. Funny, I had the same opinion of Scalia’s recent dissent.

        2. “?The Court’s insistence on making a choice that should be made by Congress both aggrandizes judicial power and encourages congressional lassitude.”

          Boy, Kagan nailed it.

          Oh wait, that was actually said by Scalia in his Obamacare dissent. One mans ceiling is another mans floor.

  22. Is there a Facebook photo filter to commemorate this?

  23. “The amount of mercury being emitted into the environment as been already fallen by more than 60 percent, largely because mercury containing products have been diverted from incinerators.”

    Does this mean they’ve begun pulling teeth at the crematorium ?

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