thumbs upNew mercury pollution standards: something everyone should celebrate.Environmentalists and public health advocates have a reason to stand up and cheer: Finalized rules to cut down on mercury air pollution are set to be announced today by the EPA.

But economists can also feel good about this holiday-season gift of clean air: Two decades of agency analysis have found the EPA’s new mercury standards for power plants to be overwhelmingly cost-benefit justified. With annual compliance costs around $11 billion, and health benefits estimated to be up to $140 billion per year, even the most hard-nosed bean counter should be feeling festive.

But that’s only part of the story. This number doesn’t even fully capture the benefits of the rule, because EPA’s economic analysis does not include many of the risks of mercury pollution. 

The EPA’s analysis of mercury reduction benefits is limited to quantifying lost future earnings due to lower IQ. The idea here is that mercury, a neurotoxin, can cause development problems for in utero fetuses. To account for the cost of this risk, EPA places a price on wages lost because of lost IQ points.

But any parent whose child has been exposed to mercury will care about more than the loss of potential earnings — over a lifetime, contact with the pollutant can mean more than smaller paychecks. There are also risks of cognitive and social defects, negative autoimmune effects, genetic effects, and heart attacks that are not quantified. 

Even the narrow IQ-related effects EPA looks at are estimated only for a small group of people — children born to families that catch freshwater fish for their own consumption. Excluded are any of the potential risks that come from eating commercially bought fish, which is the vast majority of total consumption. 

Some seem to like to pretend that these unquantified risks don’t exist at all. The Wall Street Journal editorial page, in a broadside against the rule, quoted EPA’s finding that “the benefits to society from the mercury reductions in the utility rule max out at $6.1 million, total.” The paper failed to mention all of the benefits that EPA recognized, but was unable to put a dollar figure on.

Getting a handle on these risks is challenging. Once mercury enters the ocean and contaminates fish (that will eventually be eaten), it’s very difficult to trace back to the offending plants. Using current analytical techniques, it is nearly impossible to tell which mercury came from U.S. coal plants, versus Chinese coal plants, versus other nations’ coal plants. Essentially, mercury becomes everybody’s fault and nobody’s fault at the same time. But that difficulty doesn’t excuse U.S. coal plants from their share of contributing to the problem.

Even without putting an exact figure on the mercury benefits, we know the rule is richly cost-benefit justified because of all of the positive side effects that we get from reduction in other pollutants, like particulate matter (a particularly deadly air pollutant).

When the economics, public health benefits, and environmental benefits align this nicely, it takes a real Grinch to refuse to celebrate.