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.



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.