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Activists Decry Effort to Bring Economic Rationality to Clean Air Regulation

"A standard demanding the return of the Stone Age would not prove 'requisite to protect the public health.'"

CostBenefitElnurDreamstimeElnur/DreamstimeEvery day we all have to make trade-offs between various goods, services, and opportunities. So when we spend our money, most of us try to make sure the benefits of what we purchase or invest in outweigh their costs. Surely government regulators should strive to do the same thing, right? If the costs of a regulation outweigh its benefits, then it would be a bad idea to adopt it.

That's the simple idea that Environmental Protection Agency (EPA) chief Scott Pruitt advanced this week in a memorandum on updating the country's National Ambient Air Quality Standards (NAAQS). The memo asks the agency's independent Clean Air Scientific Advisory Committee to watch out for "any adverse public health, welfare, social, economic, or energy effects which may result from various strategies for attainment and maintenace of such NAAQS."

For some activists, that makes this memo an outrage.

You may have assumed that the government already tries to weigh the benefits and costs of clean air regulations. It doesn't. In the 2001 case Whitman v. American Trucking Associations, Justice Antonin Scalia, writing for the majority of U.S. Supreme Court, noted that under the Clean Air the EPA is instructed "to set primary ambient air quality standards 'the attainment and maintenance of which...are requisite to protect the public health' with 'an adequate margin of safety.'" Scalia concluded that the Act's mandate to protect public health "unambiguously bars cost considerations from the NAAQS-setting process." Notionally speaking, this implies that there's no limit to the amount the EPA could force emitters to spend if by reducing air pollution by one more molecule it might prevent one extra asthma attack. Never mind the jobs lost, the wages foregone, the health insurance premiums unpaid, the doctor's appointments never made, and the cancer diagnoses missed.

In a concurring opinion, Justice Stephen Breyer did suggest that there might be a limit to just how much clean air standards should cost. As he observed, "preindustrial society was not a very healthy society; hence a standard demanding the return of the Stone Age would not prove 'requisite to protect the public health.'" At minimum, then, regulations that would entirely de-industrialize the country would likely be ruled out.

Barack Obama's EPA took Scalia's reasoning to heart when it issued new regulations on power plants that aimed to reduce their emissions of mercury. In the 2015 case Michigan v. EPA, the same Justice Scalia who ruled that costs were no object in Whitman noted that the agency's own Regulatory Impact Analysis "estimated that the regulation would force power plants to bear costs of $9.6 billion per year. The Agency could not fully quantify the benefits of reducing power plants' emissions of hazardous air pollutants; to the extent it could, it estimated that these benefits were worth $4 to $6 million per 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."

In this new majority opinion, Scalia and the court distinguished between the provisions of the Clean Air Act setting NAAQS and those limiting the emissions of pollutants from power plants. The majority concluded that "it was unreasonable for EPA to read [the statutory provisions] to mean that cost is irrelevant to the initial decision to regulate power plants. The Agency must consider cost—including, most importantly, cost of compliance—before deciding whether regulation is appropriate and necessary." The Court sent the case back to the agency for another try.

The Obama EPA duly issued a 2016 supplemental finding claiming that putting limits on power plant mercury emissions would produce clean-air benefits worth up to $90 billion at a mere cost of $9.6 billion. A 2016 study funded by the Electric Power Research Institute countered that about 99 percent of the rule's monetized health benefits from reduced particulate pollution were projected to occur in areas that had already attained the appropriate NAAQS for particulates. In other words, the agency was padding its calculations by double-counting benefits.

At the request of the Trump EPA, the Court of Appeals for the District of Columbia Circuit agreed in April 2017 to delay litigation over the new mercury emissions rule while EPA reviews the supplemental finding.

The EPA is supposed to review and update the NAAQS every five years. Pruitt's proposal to bring a bit of economic rationality to the new review has provoked outcries from activists. "It's stacking the deck on behalf of industry," the Harvard Joel Schwartz environmental epidemiologist tells the Associated Press. "This is all an attempt to create a process that limits the science that can be considered and include external factors that aren't relevant, with a goal of ripping out the heart and lungs of the Clean Air Act," Paul Billings of the American Lung Association tells InsideClimateNews.

On its face, the EPA's proposal to balance the costs and benefits of air pollution regulations makes a lot of sense. As the saga of the Obama administration's supplemental finding on mercury emissions suggests, agencies can gin up pretty much whatever figures they like to justify their regulatatory decisions. There are a lot of opportunities to put your thumb on the scales when combining econometric models, regional pollution projections, and highly elastic epidemiological studies. In this case, the pendulum swing of regulatory action might at least for a while swing back toward economic rationality.

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  • Longtobefree||

    The EPA is supposed to review and update the NAAQS every five years.

    So, like the food pyramid, we start by declaring that whatever we put out is wrong, and we will fix it in five years.
    Damn fine idea.

  • SimonP||

    Yeah, who cares what the law actually requires? As long as Pruitt illegally pursues "economic rationality," it's okay, right?

    Would it kill Reason to hire writers on legal subjects who actually understand how the law works? In this piece, Ronald all but concedes that there is no legal basis for the approach to policy-making he advocates, and the only contrary decisions he bothers to cite arise in a legally distinguishable context, addressing a very different kind of limit on regulatory authority. It's just amateurish.

  • Rossami||

    Did you actually read the article before starting your rant? In particular, did you read as far as the SCOTUS 2015 decision which distinguished from the 2001 decision and found that not only is there a legal basis, it is a legal requirement?

  • SimonP||

    I did. You apparently don't understand it.

    As noted in the story you don't understand, Scalia's opinion addressed a regulatory provision distinct from the NAAQS-setting provision and only specified that there is a theoretical limit to the EPA's mandate to regulate emissions without consideration of cost. It does not mean that the entire CAA incorporates a CBA requirement. It just means that the EPA can't completely ignore cost.

  • Ron Bailey||

    SP: Noting the distinction between the cases suggests that I do understand - the memo is aimed at widening the sort of info that can be included in determining public health protections

  • SimonP||

    Right, contrary to what the law permits.

  • Scarecrow Repair & Chippering||

    And in agreement with what the second Supreme Court ruling says.

    What point do you think you are making?

  • SimonP||

    Take your toys and go home. This is a discussion for grown-ups.

  • Mr. Gus||

    ...so the Supreme Court doesn't decide what's legal, then, or are you just a moron?

  • SimonP||

    ..so the Supreme Court doesn't decide what's legal, then, or are you just a moron?

    No, I just understand the law and can read a fucking opinion. The Supreme Court decided, in the 2015 case, that statutory authorization to impose "appropriate and necessary" regulation of power plants implicitly ruled out regulating without any consideration of cost. In the 2001 case, the Supreme Court considered whether the statutory mandate to set NAAQS, which are required to be set at levels "requisite" to achieve particular health and welfare goals, permitted the EPA to consider "cost," concluding that it did not.

    They are considering totally separate statutory provisions and different statutory language. Ronald's juxtaposition of these cases with a fair bit of editorializing about how regulations ought to be drafted has evidently confused you on what the Supreme Court has actually said on the question.

  • Sevo||

    "The Supreme Court decided, in the 2015 case, that statutory authorization to impose "appropriate and necessary" regulation of power plants implicitly ruled out regulating without any consideration of cost. In the 2001 case, the Supreme Court considered whether the statutory mandate to set NAAQS, which are required to be set at levels "requisite" to achieve particular health and welfare goals, permitted the EPA to consider "cost," concluding that it did not."
    Cites to these, please?
    Oh, and Ron, it would have been helpful if you had offered them...

  • Sevo||

    Still waiting...

  • SimonP||

    Still waiting...

    Fuck you. I'm not on your schedule.

    The cites to the cases I'm talking about are in the main fucking post, moron. I'm not walking you through how to read or parse a Supreme Court opinion, so you'll have to figure it out from there. Obviously it's likely to be something of a lost cause, given how you're unable to grasp that the main post already hyperlinked the opinions you're asking me to cite for you.

  • Finrod||

    You're a fucking moron, SimonP. Stop whining like a little bitch.

  • Scarecrow Repair & Chippering||

    I'd guess your illustration of your example actually illustrates that you are the one so focused on some legal quibblery that you fail to understand the basic thrust of the article.

    Forest and trees, familiar with the concept you are not.

  • Sevo||

    "Would it kill Reason to hire writers on legal subjects who actually understand how the law works? In this piece, Ronald all but concedes that there is no legal basis for the approach to policy-making he advocates, and the only contrary decisions he bothers to cite arise in a legally distinguishable context, addressing a very different kind of limit on regulatory authority. It's just amateurish."

    Oh! Oh! Outraged lefty alert!
    YOU pay for it, twit.

  • SimonP||

    Wanting the government to abide by the law is a "lefty" concern, now?

  • Greg F||

    Wanting the government to abide by the law is a "lefty" concern, now?


    So you agree the EPA's CO2 endangerment finding should be dumped.

  • SimonP||

    Why would that follow? As far as I am aware, the science supports the endangerment finding, as framed by the statute - as the Supreme Court has confirmed. So unless you have some basis for saying the EPA reached its conclusion incorrectly, the finding should stand.

  • Greg F||

    http://www.thecre.com/pdf/2014.....2_cert.pdf

    EPA noted that the TSD consisted only of science that was previously peer reviewed, and that these reviews were deemed adequate under the Agency's policy. EPA had the TSD reviewed by a panel of 12 federal climate change scientists. This review did not meet all OMB requirements for peer review of a highly influential scientific assessment primarily because the review results and EPA's response were not publicly reported, and because 1 of the 12 reviewers was an EPA employee.

    They also relied heavily on the IPCC report where 30% of the references were from grey literature (non peer reviewed). The climate models they relied on have never been validated and cannot even hindcast past climate.

    As far as I am aware, the science supports the endangerment finding ...


    It doesn't. The "settled science" never predicted the pause. The so called "finger print" of the lower tropical troposphere warming faster than the surface doesn't exist. Climate science appears to be our centuries version of Eugenics.

  • SimonP||

    From the same report (and your cherry-picking is duly noted):

    EPA met statutory requirements for rulemaking and generally followed
    requirements and guidance related to ensuring the quality of the supporting
    technical information.

    Seems that's the end of the discussion. Whether the EPA properly abided by OMB rules is an interagency/executive matter, and not, as you seem to have missed, a question of whether the EPA's endangerment finding was contrary to law.

    It doesn't. The "settled science" never predicted the pause. The so called "finger print" of the lower tropical troposphere warming faster than the surface doesn't exist. Climate science appears to be our centuries version of Eugenics.

    Why don't you point me to the right-wing feverblog you copy-pasted this from?

  • Greg F||

    Why don't you point me to the right-wing feverblog you copy-pasted this from?


    Typical talking point response from an ignorant lefty. Can't dispute the evidence so resort to ad hominem.

  • Greg F||

    Why don't you point me to the right-wing feverblog you copy-pasted this from?

    Retrospective prediction of the global warming slowdown in the past decade

    Despite a sustained production of anthropogenic greenhouse gases, the Earth's mean near-surface temperature paused its rise during the 2000–2010 period

    The Case of The Missing Heat

    Although there have been jumps and dips, average atmospheric temperatures have risen little since 1998, in seeming defiance of projections of climate models and the ever-increasing missions of greenhouse gases.

    From the "right-wing feverblog" IPCC WG1-AR5:

    Regardless, all global combined LSAT and SST data sets exhibit a statistically non-signifcant warming trend over 1998–2012 (0.042°C ± 0.093°C per decade (HadCRUT4); 0.037°C ± 0.085°C per decade (NCDC MLOST); 0.069°C ± 0.082°C per decade (GISS)). An average of the trends from these three data sets yields an estimated change for the 1998–2012 period of 0.05 [–0.05 to +0.15] °C per decade.


    The pause lasted up till the latest El Nino in 2016 and the temperatures have been heading down again.

  • Greg F||

    Why don't you point me to the right-wing feverblog you copy-pasted this from?


    Typical talking point response from an ignorant lefty. Can't dispute the evidence so resort to ad hominem.

  • Scarecrow Repair & Chippering||

    And understanding that the law is interpreted by the second Supreme Court decision is hard, isn't it.

  • SimonP||

    The 2015 decision interprets a supplementary authorization for regulatory action that is distinct from the standard applicable to setting NAAQS. It has no bearing on what the EPA is permitted to do, when setting NAAQS, as Pruitt's own memo acknowledges.

  • Sevo||

    SimonP|5.11.18 @ 4:04PM|#
    "Wanting the government to abide by the law is a "lefty" concern, now?"

    Dragging red herrings around to avoid the real purpose is typical of lefties, so yes, you'll forgive my perfectly accurate observation.

  • SimonP||

    Well, lazy ad hominems are a regular go-to of the braindead Reason commentariat, but you don't see me complaining, do you?

  • Sevo||

    SimonP|5.11.18 @ 7:24PM|#
    "Well, lazy ad hominems are a regular go-to of the braindead Reason commentariat, but you don't see me complaining, do you?"

    Did you have a point?

  • SimonP||

    Did you have a point?

    Did you?

  • Sevo||

    SimonP|5.11.18 @ 9:33PM|#
    "Did you?"

    Absolutely!
    I correctly identified you as a lefty, which you mistakenly characterized an ad-hom.
    Now, did you have a point?

  • Ron Bailey||

    SP: Actually the memo takes note of the 2001 SCOTUS ruling but adds that economic information is actually often relevant to making policies that aim to help protect public health. My suspicion is that the EPA is sitting up an opportunity for the SC to revisit the 2001 ruling and harmonize it with the 2015 ruling - and yes I should have explained that in the article.

  • SimonP||

    Actually the memo takes note of the 2001 SCOTUS ruling but adds that economic information is actually often relevant to making policies that aim to help protect public health.

    Actually, the memo doesn't say this, at all.

    My suspicion is that the EPA is sitting up an opportunity for the SC to revisit the 2001 ruling and harmonize it with the 2015 ruling[.]

    The idea that any "harmonization" is required when Scalia himself clarified the relationship of the 2001 and 2015 opinions to one another is ridiculous, and just helps to illustrate your lack of sophistication in this area.

  • Scarecrow Repair & Chippering||

    Your refusal to understand that a 2015 decision trumps a 2001 decision is interesting. I'd like to subscribe to your newsletter.

  • SimonP||

    Look, if you don't know what you're talking about, you don't need to say anything. The 2015 and 2001 decisions address different statutory provisions, and nothing in the 2015 opinion purports to reverse or cut back the 2001 decision. Read them, if you don't believe me.

  • Finrod||

    Whiny leftist tells other people to read when the whiny leftist hasn't read it themselves.

  • Ron Bailey||

    SP: Sorry - this too late, but I was away in an internet-free zone for the weekend. In any case, the memo actually does too take note of the 2001 ruling: But although the Supreme Court has held that the Agency may not consider the costs of implementation when reviewing and revising the standards, the Court did note that CASAC's "advice concerning certain aspects of 'adverse public health ... effects' from various attainment strategies is unquestionably pertinent" to the NAAQS rulemaking record and relevant to the standard-setting process. Notably, the CAA does not require the Administrator to establish a primary
    NAAQS at a zero-risk level or at background concentration levels, but rather at a level that reduces risk sufficiently so as to protect public health ….

  • Sevo||

    "Scalia concluded that the Act's mandate to protect public health "unambiguously bars cost considerations from the NAAQS-setting process." Notionally speaking, this implies that there's no limit to the amount the EPA could force emitters to spend if by reducing air pollution by one more molecule it might prevent one extra asthma attack. Never mind the jobs lost, the wages foregone, the health insurance premiums unpaid, the doctor's appointments never made, and the cancer diagnoses missed."

    There is no requirement that SCOTUS justices have even a passing familiarity with econ, but this sets new standards of idiocy.
    By this standard, preventing that one asthma attack could bankrupt the country and every one who lives here, and that's just fine.
    Oh, I know, 'they wouldn't do that!'. Just like taxes are 'voluntary'; they'd never enforce it with the threat of being shot.
    The dimwits who make those claims have never dealt with the IRS, of for that matter, the DMV.

  • Scarecrow Repair & Chippering||

    If nothing else, you'd think ecofreaks would want to maximize eco protection, and to do that, you have to know what is most effective.

    I like to compare it to walking around holding a manhole cover over your head for protection from falling birds, airline sewage ice, and tiny meteors. Sure not cost-effective! If you want to save lives, it's more cost efficient to vaccinate African children than mandate 50 airbags per American car.

    Back on point -- it speaks to the bankruptcy of most eco warrior philosophy that they think cost is irrelevant.

  • SimonP||

    It's not eco-warriors who are to blame here. It's Congress. Republicans have had years of total government control (and even more of congressional majorities) when they could have revised the CAA to more pervasively employ CBA in setting NAAQS. They have never done so. Why?

    Here's something that's true: the earliest environmental protection laws we have on the books are blunt, unsophisticated instruments. There are more sophisticated and efficient ways to address the problems they were enacted to address, but decades of congressional misfeasance and neglect have resulted in just successive administrations trying to do the best they can (or not, when it comes to Pruitt). A good example of this was Obama's initial attempt to impose a cap and trade model for regulating carbon emissions. That's what sophisticated economies are doing, but it's just not authorized by the CAA. That's why we have the much-maligned regulatory framework we have now, such as it is.

    What we need is a good-faith study and modernization of our federal environmental laws. We can do a lot to protect public health and welfare while at the same time minimizing economic burdens on polluters.

  • soldiermedic76||

    Eco warriors are exactly to blame. There are multiple examples of them rejecting the best method as stated by science in favor of their preferred method (which generally only benefits them). This can be seen especially in regards to how they use the ESA to attack agriculture band other industries. For example, here in Montana they have sued the Corp of Engineers from proceeding on a project that will benefit pallid sturgeons. They have lost multiple lawsuits but continue to sue, despite the fact that biologists have stated without this project pallid sturgeons may go extinct on the Yellowstone River. And the longer the lawsuits delay the project, the more danger the sturgeon are in. However, because the project will still allow diversion for irrigation the eco groups continue to sue, despite the fact that they are actually harming sturgeon by suing.
    As for your assertion about cap and trade, I would like to reference the fact that the USA has lowered GHG emissions faster than Europe, and in fact Europe has actually increased CO2 emissions last year, despite having cap and trade.

  • SimonP||

    I'm not familiar with the pallid sturgeon, but it sounds from your description and some quick googling that the process is working exactly as intended. The environmental groups are losing in court because they don't have the evidence.

    As for your assertion about cap and trade, I would like to reference the fact that the USA has lowered GHG emissions faster than Europe, and in fact Europe has actually increased CO2 emissions last year, despite having cap and trade.

    Cool cherry-picking, bro, but I don't know what you think you're demonstrating here. If you're saying that the U.S.'s approach to limiting CO2 emissions is more effective than Europe's, then okay. All I was saying is that our environmental protection laws are antiquated and something like cap and trade - which reduces the need to rely on central bureaucratic planning and provides a more efficient means of controlling emissions growth - might be preferable to an approach which simply limits what polluters can emit, which is the system we have.

  • soldiermedic76||

    No, it wasn't cherry picking. It was a statement that free markets are better then planned markets. And as for the pallid sturgeon, no the process isn't working. They continue to sue, which imperils the species and the farmers. And they have vowed to continue to sue until they get their way. This is the problem, they don't want to compromise, even if the compromise is better, they only want it their way. If the law allows the environmental groups to sue until it is to late then the law is simply bad, period.

  • I'm Not Sure||

    "This is the problem, they don't want to compromise, even if the compromise is better, they only want it their way."M

    Environmentalists in Washington state opposed an initiative that would establish a carbon tax on refineries and utilities because it didn't raise revenue for pro-environmental causes.

  • soldiermedic76||

    Also, if the US is accomplishing it's goals with no pertinent law, why did you even mention the need for a law such as cap and trade? Isn't free market solutions (which have mainly contributed to our decline in GHG emissions and other particulate emissions) the ultimate way to cut down on centralized bureaucracy?
    And just what data did I cherry pick?

  • Finrod||

    To SimonP, mentioning data that contradicts him is "'cherry-picking".

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