Chuck Bednar for redOrbit.com – @BednarChuck
The US Supreme Court ruled on Monday that an Environmental Protection Agency (EPA) had violated the Clean Air Act by failing to undertake a cost-benefit analysis before instituting new regulations governing emissions at coal-fired power plants.
According to BBC News and the New York Times, the court ruled by a 5-4 vote that regulations designed to cut back on the amount of mercury and other toxic emissions instituted by the EPA in 2012 violated the existing law’s requirements that all new regulations be found to be “appropriate and necessary” by not factoring in the financial cost.
Writing on behalf of the majority, Justice Antonin Scalia said the EPA was required to weigh “[the] cost of compliance… before deciding whether regulation is appropriate and necessary.” He added that it was “not rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits.”
Disagreement over the value of the program’s benefits
The EPA argued that it did not have to take costs into account when it making the initial decision to impose the regulations, but added that it had done so when setting emissions standards later on and that the benefits outweighed the costs anyway.
Officials from 21 states and several private-sector firms disagreed, claiming that the cost of installing the new equipment required to remove pollutants would have cost the power industry up to $9.6 billion per year. While the EPA claimed that the costs would yield over $35 billion in benefits, industry groups claimed that the figure was closer to just $6 million.
In dissent, Justice Elena Kagan wrote that the agency had “acted well within its authority in declining to consider costs at the opening bell of the regulatory process given that it would do so in every round thereafter – and given that the emissions limits finally issued would depend crucially on those accountings.”
Harvard law professor Richard Lazarus told the Los Angeles Times that the verdict “overturns one of EPA’s most important pollution control rules. The good news is that EPA can likely go back and reissue the same rule, this time taking costs into account,” he added. “The bad news is that this may take a long time to accomplish. The Obama administration will be hard-pressed to get the job done before it goes out of office.”
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