Economists see ‘deep flaws’ in Trump EPA plan to undercut pollution rule

By proposing to obliterate the legal justification for restricting toxic pollution from power plants, the U.S. Environmental Protection Agency has flouted bedrock practices that have driven federal policymaking for decades, according to a group of resource economists writing in the journal Science.

Finalized in 2012, the agency’s Mercury and Air Toxics Standards, or MATS, was the first U.S. rule to regulate mercury, a potent neurotoxin emitted primarily from coalburning power plants. The power industry has complied with it since April 2016, the deadline spelled out in the rule.

Once Donald Trump entered the White House in 2017, however, environmental regulations from the era of his predecessor, Barack Obama, came under scrutiny. Two months into his presidency, Trump directed the EPA to rewrite the Clean Power Plan, the centerpiece of Obama’s climate program. Two months later, he announced he would withdraw the U.S. from the 2015 Paris Agreement. The administration has sought to change rules that address methane emissions, coal-ash waste and car pollution.

The EPA wouldn’t eliminate the mercury rule with this proposal. Instead, it would eliminate the findings that underpin it. The agency is arguing that controlling mercury and other toxic air pollution from power plants is no longer “appropriate and necessary” – a critical legal precondition for those mandates. Doing so would provide fodder for opponents of the standards to challenge them in federal court by saying that the pollution controls themselves are no longer legally required.

At issue specifically is the 2018 cost-benefit analysis underlying the proposed regulatory measure. Cost-benefit analysis is an arcane but powerful tool that has guided the development of federal regulations for four decades. “We’ve had a bipartisan consensus dating to Ronald Reagan that we should analyze the benefits and costs of the regulations that agencies issue,” says Joseph Aldy, a public policy professor at Harvard’s Kennedy School of Government, a former adviser to Obama and the Science article’s lead author. He called the EPA’S pollution analysis “some kind of legal distinction that’s somehow inconsistent with the engineering, public health and economic” realities.

The Science piece is a condensed version of a longer analysis released in December, in which the economists criticize the proposal for several “deep flaws”:

– It doesn’t account for what regulators call cobenefits, or reductions in pollution aside from the intended ones. MATS, for instance, also leads to reductions in airborne particulate matter, which kills about 7 million people a year globally according to the World Health Organization. This benefit alone was determined by the EPA in 2011 to be worth more than three times the expected cost.

– Research since 2011 into the direct harms of mercury pollution – which affects cognitive and motor development in fetuses and young children and interferes with adults’ nervous-system functioning, which can lead to heart disease among other health issues – has enabled more robust cost-benefit estimates than were available when the rule was written. The most recent estimates show that MATS would yield more than $100 billion in total health benefits through 2050, almost entirely from prevented heart attacks. More broadly, the EPA’S cost-benefit analysis “significantly overestimated the costs and underestimated the benefits,” says Matthew Kotchen, an economist at Yale University and a co-author of the article. That’s in part because coal makes up far less, and natural gas far more of U.S. power generation than anyone expected a decade ago when the mercury rules were being written. The agency appears not to have taken into consideration data from the utilities’ three years of compliance.

This rule change has been long expected, but more recently environmental groups have decried what they see as the administration – along with some states and corporate entities – taking advantage of attention shifting to COVID-19 to loosen regulations still further. At the end of March, for instance, the administration temporarily relaxed civil enforcement of various EPA regulations, citing challenges related to the virus. The government of Canada’s Alberta province also extended a $5.3 billion aid package to TC Energy Corp., the oil distributor behind the longdisputed Keystone XL pipeline, at a time when an increasing number of U.S. states are criminalizing protests against pipelines, which they deem “critical infrastructure.”