On December 27, 2018, the Trump EPA proposed a rule undoing the Obama EPA’s finding that it is “appropriate and necessary” to regulate emissions of mercury and other hazardous air pollutants (HAPs) from coal- and oil-fired power plants under the Clean Air Act (CAA). This proposed revised finding is a preliminary step to eventually undoing the Obama EPA’s final rule limiting mercury emissions from those power plants—the 2012 Mercury and Air Toxics Standards (MATS rule).
At issue is the basis of the Obama EPA’s finding that it is “appropriate and necessary” to regulate those emissions. The Supreme Court indicated in Michigan v. EPA, 135 S. Ct. 2699 (2015), that EPA must take cost into consideration in its decision whether to require power plants to reduce HAPs emissions under the CAA. In response, the Obama EPA reaffirmed in a 2016 “Supplemental Finding” that it had adequately done so before issuing the MATS rule. The Obama EPA admitted that the direct quantifiable benefits of reducing mercury emissions are a relatively modest $4-6 million a year, while the MATS rule costs the power sector and its customers $9.6 billion a year. But, it argued, the MATS rule also creates an additional $36-89 billion a year in “co-benefits” by incidentally reducing power sector emissions of particulate matter and SO2. Taking these co-benefits into account, the Obama EPA found, more than justifies the cost of the MATS rule.
The Trump EPA now describes “EPA’s equal reliance on the particulate matter (PM) and air quality co-benefits projected to occur as a result of the reductions in HAP” as “flawed.” Instead, it argues, “if the HAP-related benefits are not at least moderately commensurate with the cost of HAP controls, then no amount of co-benefits can offset this imbalance for purposes of a determination that it is appropriate to regulate under [the] CAA.”
The Trump EPA is constrained by prior D.C. Circuit precedent from immediately de-listing coal- and oil-fired power plants and rescinding the MATS rule, which has been in effect for several years. Indeed, major players in the power industry, who, to comply with the MATS rule, have already closed multiple coal-fired power plants and invested billions of dollars in technology for coal-fired power plants that remain open, are against rescinding the regulation. If the EPA wants to proceed with rescinding the rule, it would have to do so in a separate rulemaking.
However, the Trump EPA’s proposed finding sends an important signal to allies in the coal industry. Further, it also undermines a major justification for proceeding with other environmental regulations. In light of the Supreme Court’s decision in Michigan v. EPA, certain environmental regulations may never make it onto the books if “co-benefits” are not taken into account.