I'm missing something here (Supreme court blocks Obama's limits on power plants):
The Supreme Court on Monday blocked one of the Obama administration’s most ambitious environmental initiatives, an Environmental Protection Agency regulation meant to limit emissions of mercury and other toxic pollutants from coal-fired power plants.
Industry groups and some 20 states had challenged the E.P.A.’s decision to regulate the emissions, saying the agency had failed to take into account the punishing costs its rule would impose.
The Clean Air Act required the regulation to be “appropriate and necessary.” The challengers said the agency had run afoul of that law by deciding to regulate the emissions without first undertaking a cost-benefit analysis.
Writing for the majority, Justice Antonin Scalia wrote: “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. Statutory context supports this reading.”
The E.P.A. had argued that it was not required to take costs into account when it made the initial determination to regulate. But the agency added that it had done so later in setting emissions standards and that, in any event, the benefits far outweighed the costs.
The two sides had very different understandings of the costs and benefits involved. Industry groups said the government had imposed annual costs of $9.6 billion to achieve about $6 million in benefits. The agency said the costs yielded tens of billions of dollars in benefits.
The decision, Michigan v. Environmental Protection Agency, No. 14-46, does not strike down the rule, but it means the E.P.A. will have to review and rewrite it, taking costs into consideration. Industries will be expected to comply with the current rule until a revised one is issued.
And here WaPo:
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 $37 billion, a figure that includes costs related to as many as 11,000 premature deaths and more than a half-million lost days of work each year.
This is from the executive summary of the EPA's RIA [PDF]:
This rule will reduce emissions of Hazardous Air Pollutants (HAP), including mercury, from the electric power industry. As a co-benefit, the emissions of certain PM2.5 precursors such as SO2 will also decline. EPA estimates that this final rule will yield annual monetized benefits (in 2007$) of between $37 to $90 billion using a 3% discount rate and $33 to $81 billion using a 7% discount rate. The great majority of the estimates are attributable to co-benefits from 4,200 to 11,000 fewer PM2.5-related premature mortalities. The monetized benefits from reductions in mercury emissions, calculated only for children exposed to recreationally caught freshwater fish, are expected to be $0.004 to $0.006 billion in 2016 using a 3% discount rate and $0.0005 to $0.001 billion using a 7% discount rate. The annual social costs, approximated by the compliance costs, are $9.6 billion (2007$) and the annual monetized net benefits are $27 to $80 billion using 3% discount rate or $24 to $71 billion using a 7% discount rate. As discussed in Chapter 3, costs were annualized using a 6.15% discount rate. The benefits outweigh costs by between 3 to 1 or 9 to 1 depending on the benefit estimate and discount rate used. There are some costs and important benefits that EPA could not monetize, such as other mercury reduction benefits and those for the HAP other than mercury being reduced by this final rule. Upon considering these limitations and uncertainties, it remains clear that the benefits of the MATS are substantial and far outweigh the costs. Employment impacts associated with the final rule are estimated to be small.
Is the legal issue the fact that the rule was proposed and then the benefit-cost analysis was conducted (instead of conducting the BCA, finding positive net benefits, and then proposing the rule) or is the legal issue the fact that Justice Scalia prefers the lower benefit estimates?
Note: Here is a previous post on the BCA.
