In a major victory for benefit-cost analysis:
In a major victory for the Obama administration, the Supreme Court on Tuesday upheld the authority of the Environmental Protection Agency to regulate the smog from coal plants that drifts across state lines from 28 Midwestern and Appalachian states to the East Coast.
The 6-to-2 ruling bolsters the centerpiece of President Obama’s environmental agenda: a series of new regulations aimed at cutting pollution from coal-fired power plants. Republicans and the coal industry have criticized the regulations, which use the Clean Air Act as their legal authority, as a “war on coal.” The industry has waged an aggressive legal battle to undo the rules. ...
The interstate air pollution regulation, also known as the “good neighbor” rule, has pitted Rust Belt and Appalachian states like Ohio, Michigan and Kentucky against East Coast states like New York and Connecticut.
In its arguments before the court, the E.P.A. said the rules were necessary to protect the health and the environment of downwind states. East Coast states in particular are vulnerable to pollution blown by the prevailing west-to-east winds of the United States. The soot and smog produced by coal plants are linked to asthma, lung disease and premature death.
In her decision, Justice Ginsburg noted that in reining in interstate pollution, regulators must account for the vagaries of the wind. ...
In a dissent, Justice Antonin Scalia, joined by Justice Clarence Thomas, said the regulation was unwieldy and suggested it was Marxist. As written, the regulation will require upwind polluting states to cut pollution in relation to the amounts of pollution each state produces, but also as a proportion of how affordably a state can make the cuts. In other words, states that are able to more cost-effectively reduce pollution will be required to cut more of it.
“I fully acknowledge that the proportional-reduction approach will demand some complicated computations where one upwind state is linked to multiple downwind states and vice versa,” Justice Scalia wrote.
“I am confident, however, that E.P.A.’s skilled number-crunchers can adhere to the statute’s quantitative (rather than efficiency) mandate by crafting quantitative solutions. Indeed, those calculations can be performed at the desk, whereas the ‘from each according to its ability’ approach requires the unwieldy field examination of many pollution-producing sources with many sorts of equipment,” he said, paraphrasing Karl Marx.
Economic incentive based policy, such as a carbon tax, can be used to cut pollution in proportion to how much is produced and is cost-effective (here is some background). With a carbon tax lower cost polluters end up cutting more pollution and the overall cost falls. Equating the efficiency properties of incentive-based policy with Marx is odd.
Here is Rachel Cleetus' reaction:
Today’s Supreme Court ruling reinstating limits on sulfur dioxide (SO2) and nitrogen oxides (NOx) from coal-fired power plants, as required by the Cross State Air Pollution Rule (CSAPR), is a significant victory for our public health. The 6-2 decision makes clear that CSAPR’s provisions fully conform with the Clean Air Act and should be implemented as directed. ...
In 2011 EPA estimated that, by 2014, the rule would prevent an estimated 13,000 to 34,000 premature deaths and 400,000 cases of aggravated asthma, providing $120 to $280 billion in annual health and environmental benefits. These benefits would be achieved at annual costs of $800 million due to the rule.