Last Friday, a five-justice majority of the Supreme Court kicked off the weekend with a bang when it ruled that state bans on same-sex marriage are unconstitutional. The White House celebrated by going Technicolor. New York and San Francisco were so happy they threw parades.
But bright and early Monday morning, before Chipotle even had a chance to deflate its giant burrito float, a different five-justice majority made clear that the party was over. In an opinion authored by Justice Antonin Scalia, the court sided with challengers to EPA’s Mercury and Air Toxics Standards, one of the most significant environmental rules of the Obama presidency. SCOTUS, in other words, acid-rained all over our parade.
“So how depressed should I be?” people keep asking me. (And by “people,” I mean “two friends from law school.”)
Not that depressed, you guys. This ruling may not be a big rainbow-hued delight like the marriage one, but it’s not a total disaster either. To understand why, it’s helpful to have a bit of context.
The Mercury and Air Toxics Standards, also known as “MATS,” are the culmination of a very long regulatory process. Back in 1990, when a bipartisan majority of Congress overhauled the Clean Air Act, legislators instructed EPA to undertake a study of any threats to public health posed by power plants’ emissions of “hazardous air pollutants” — essentially, toxic substances that can cause cancer or other serious health effects like infertility. The agency was then required to determine, based on the study results, whether regulating such emissions was “appropriate and necessary.”
Congress gave EPA three years to complete the study, so, naturally, it took eight.
Ultimately, the agency found that, while power plants emit a number of hazardous air pollutants, mercury was of greatest concern because it is “highly toxic, persistent, and bioaccumulates in food chains.” When airborne mercury settles in bodies of water, it can change into methylmercury, which then accumulates in fish that live in the polluted water. Humans who eat this contaminated fish risk neurological damage. And because developing fetuses are especially vulnerable to the effects of mercury exposure, EPA was particularly concerned with the consumption of contaminated fish by women of childbearing age.
Despite these findings, two more years passed before the agency chose to make the official determination, in the final days of the Clinton administration, that regulating plants’ mercury emissions was “appropriate and necessary.”
More than a decade later, after some complicated regulatory detours during the George W. Bush years, the Obama administration’s EPA reaffirmed the “appropriate and necessary” finding and, in 2012, issued MATS, which at last set strict limits on power plants’ emissions of not just mercury, but also other heavy metals like arsenic and nickel, as well as “acid gases” like hydrochloric and hydrofluoric acid.
Environmentalists rejoiced. Industry groups and recalcitrant states sued.
Which brings us back to yesterday’s Supreme Court decision. Scalia and the other justices in the majority found that EPA’s “appropriate and necessary” determination was invalid, because the agency failed to consider the cost of regulation as a factor in the decision.
This sounds bad, I know. If the legal basis for the rule is invalid, doesn’t that make the rule itself invalid? ARE WE ALL GOING TO DROWN IN A SEA OF MERCURY NOW?
Nah. Here’s why:
First of all, as my boss, Richard Revesz, points out over at The Hill, EPA is almost certain to find that regulating power plants’ hazardous emissions is still “appropriate and necessary,” even when costs are taken into account.
Indeed, as Justice Elena Kagan noted in her very persuasive dissent, EPA has already undertaken an extensive — like, 510 pages extensive — analysis of the costs and benefits of MATS. The agency just waited to perform this analysis until the second stage of its regulatory process, when it determined how stringently power plants’ hazardous emissions should be regulated, as opposed to the first stage, when it determined whether those emissions should be regulated at all.
In that document, EPA estimated that, once fully implemented, MATS would impose annual compliance costs of $9.6 billion a year but generate benefits at least three times as high. These benefits include $4 million to $6 million a year in avoided IQ point losses among children exposed to mercury in the womb. The remainder, an estimated $36 billion to $89 billion a year, came not from reductions in mercury or other toxic pollution, but from the “co-benefit” of decreased concentrations of fine particulate matter, which has well-known, very harmful effects on the human heart and lungs. Even though MATS was not designed to combat this sort of pollution, the control technologies necessary to rein in toxic emissions necessarily reduce particulate formation as well, and EPA calculated that these reductions would prevent up to 11,000 premature deaths and 4,700 nonfatal heart attacks each year.
Additionally, EPA cited a number of benefits from reducing mercury and other toxic pollution that it recognized as significant but could not quantify, such as avoided problems with memory, fine motor skills, and behavior in exposed children.
Federal agencies quite routinely include both co-benefits and unquantified benefits in their cost-benefit analyses. In fact, a guidance document issued by the White House’s Office of Management and Budget under the second Bush administration explicitly instructs them to do so.
Furthermore, Scalia and the other justices who ruled against EPA on Monday explicitly declined to criticize the content of the agency’s cost and benefit estimates. They merely took issue with the fact that the agency didn’t take those estimates into account when making its “appropriate and necessary” finding.
So, theoretically, EPA should be able to respond to the Supreme Court’s decision by simply pointing to the analysis it’s already performed and saying, “Yep, we’re aware of these costs, and we still think it’s appropriate and necessary to regulate power plants’ hazardous emissions.”
A second thing to note is that the Supreme Court did not strike MATS down (or “vacate” the rule, in legal parlance). Instead, it just kicked the case back to the D.C. Circuit Court of Appeals with the instruction that EPA “must consider cost … before deciding whether regulation is appropriate and necessary.” Whether the current rule remains in effect while EPA does this is up to the circuit judges, and, as Revesz explains, the D.C. Circuit often leaves challenged regulations in place while EPA responds to judicial concerns, through a process known as “remand without vacatur.” Here, the circuit judges probably won’t see a point in vacating a cost-benefit-justified (not to mention life-saving) rule that they know EPA is likely to reinstate once it jumps through a few procedural hoops.
And even if the circuit judges do vacate MATS pending EPA’s reconsideration of compliance costs, we shouldn’t see much of a change in actual pollution levels. As other commentators have already noted, the vast majority of power plants subject to the rule have already come into compliance, either by installing new pollution controls or shutting down altogether. It’s extremely unlikely that any of these plants will rise from the dead or dismantle their new, expensive control technologies simply because the rule is temporarily suspended.
So rest easy, friends. Despite the dramatic headlines, the MATS ruling’s real-world impacts should fall somewhere between negligible and nonexistent, and this summer’s gay weddings won’t have to take place in a mercury-sodden wasteland.
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Jack Lienke is a legal fellow at the Institute for Policy Integrity at New York University School of Law.
