The court’s decision stemmed from a legal challenge filed by industry groups and 21 states, which argued that the EPA’s regulations imposed unfair costs on utilities that burn coal to make electricity. (David Spencer/AP)
The Supreme Court dealt a major blow Monday to the Obama administration’s efforts to keep toxic mercury out of the nation’s air and waterways, saying U.S. officials failed to properly consider economic costs when they imposed expensive pollution controls on coal-burning power plants.
The court, in a 5-to-4 decision, halted further implementation of the 2011 Mercury and Air Toxics Standards rule, the Environmental Protection Agency’s landmark regulation that required electric utilities to reduce mercury pollution, linked in multiple studies to respiratory illnesses as well as birth defects and developmental problems in children.
The decision’s ultimate impact on pollution controls was uncertain. The justices declined to strike down the rule altogether and left open the possibility that the regulation could be altered and reinstated. Moreover, a sizable majority of the country’s coal-burning utilities already have taken steps to meet the EPA’s requirements, muting the decision’s practical effects, at least in the near term.
Still, the court’s rebuff of one of the Obama administration’s signature environmental accomplishments cheered industry groups and congressional Republicans who have long railed against the White House’s environmental policies as punitive to business. Lawmakers cited the court’s concerns about regulatory costs in vowing to fight other EPA mandates, including a controversial proposal to limit greenhouse-gas emissions blamed for global warming.
“The Supreme Court’s decision today vindicates the House’s legislative actions to rein in bureaucratic overreach and institute some common sense in rulemaking,” House Majority Leader Kevin McCarthy (R-Calif.) said after the decision was announced.
[Read: The Supreme Court’s decision in the EPA case]
Environmental groups and public health advocates called the decision a victory for polluters, and particularly for the relatively small number of utilities that have resisted the EPA’s requirements to rein in mercury emissions from coal burning. Companies were obliged to have a pollution-control strategy in place by April or, with an extension, by early next year.
“The court has sided with the dirty delinquents — the small percentage of coal-fired plants that haven’t cleaned up — and against the majority that are already protecting our children from mercury and other toxic pollutants,” said Fred Krupp, president of the Environmental Defense Fund, a nonprofit organization that is a party to the case.
The court’s decision stemmed from a legal challenge filed by industry groups and 21 states, which argued that the EPA’s regulations imposed unfair costs on utilities that burn coal to make electricity. Coal burning is the biggest single source of man-made mercury pollution, and the EPA had sought for decades to lower emissions of the toxin, citing a growing body of scientific evidence linking exposure to a wide variety of health problems, including neurological impairment in developing fetuses. Mercury contamination has resulted in health advisories being issued for hundreds of streams, rivers and lakes across the country, as well as government cautions against eating certain types of seafood.
Although mercury’s toxic effects are extensively documented, opponents of the EPA rule argued that the regulations imposed unreasonable costs on utility companies and their ratepayers. The rule required hundreds of coal-burning plants to install pollution controls or switch to alternative forms of energy, such as natural gas. Some older plants simply shut down rather than undergo expensive retrofitting.
In Monday’s ruling, the court focused on what Congress meant when it ordered the EPA to regulate toxic pollution from power plants in a way that was “appropriate and necessary,” an arguably vague standard that is silent on how costs should be factored into decision-making.
The EPA contends that it does consider costs but later in the process, after it determines whether regulations are needed to address a threat to public health. But industry groups said the agency should have conducted a costbenefit analysis at the outset, a view that five of the nine justices found convincing.
“It is not rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits,” Justice Antonin Scalia wrote in the majority opinion, which remanded the case to a lower court for a further review into how costs should be considered in the EPA’s rulemaking.
But Scalia said the court was not requiring the EPA to conduct a “formal cost-benefit analysis in which each advantage and disadvantage” is given a dollar value. “It will be up to the agency to decide (as always, within the limits of reasonable interpretation) how to account for cost,” he wrote.
The costs and benefits of the mercury regulations are themselves a matter of vigorous dispute. The EPA’s opponents say that the annual costs of compliance under the rule would be $9.6 billion but that the benefits of reduced emissions of hazardous air pollutants amount to only $4 million to $6 million.
The EPA and environmental groups estimate the savings to be at least $37 billion, a figure that includes costs related to as many as 11,000 premature deaths and more than a half-million lost days of work each year.
Some activists and legal experts said the setback to the EPA may be temporary. William J. Snape III, senior counsel for the Center for Biological Diversity, said the ruling means only that the “EPA must go through the paper exercise of calculating costs, and presumably benefits, of ‘necessary and appropriate’ regulatory authority that the statute clearly gives the agency.”
[Read: Oral arguments in Michigan v. EPA]
But industry groups and congressional Republicans praised the ruling as an overdue rebuke to the EPA.
“As children, we learn that every day can’t be Christmas. EPA just learned that today,” said Scott Segal, director of the Electric Reliability Coordinating Council. “The agency cannot continue to write rules without regard to their cost.”
EPA officials said the agency was reviewing its options. Spokeswoman Melissa Harrison noted that the justices had not challenged the agency’s ability to regulate toxic smokestack emissions through the Clean Air Act.
“EPA remains committed to ensuring that appropriate standards are in place,” Harrison said.