Tuesday, June 30, 2015

After onerous regulations put in place, rogue EPA calculates the cost is up to 2400 times higher than the benefits

The Supremes rebuke the EPA but decline to rein in its abuses.


A measure of the Environmental Protection Agency’s radicalism is that on Monday even this Supreme Court shot down one of its regulatory abuses. The agency’s extraconstitutional law-writing was too much even for the Court willing last week to tolerate the rewriting of laws for ObamaCare subsidies and housing discrimination.

In Michigan v. EPA, several states and industry groups challenged a 2012 EPA rule related to mercury emissions, which was really a pretext to force most coal-fired power plants to shut down as part of the Administration’s climate agenda. Though the rule was then the most expensive the federal government had ever issued, the EPA said it had no obligation even to consider costs when deciding whether it was “appropriate and necessary” to regulate.

The EPA later calculated—after the rule had been written and finalized—that the mercury rule would cost industry and electricity consumers $9.6 billion a year but yield direct benefits that were between 1,600 and 2,400 times smaller. A narrow 5-4 majority of the Court ruled that failing even to consider costs violates the Clean Air Act and the general requirement that executive agencies engage in “reasoned decision-making.”

“One would not say that it is even rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits,” Justice Antonin Scalia writes. “EPA’s interpretation precludes the agency from considering any type of cost—including, for instance, harms that regulation might do to human health or the environment.”

Though the direct benefits from reducing mercury only amount to $4 million to $6 million annually, the EPA conjured “co-benefits” of $37 billion to $90 billion on reality-free assumptions. As an example of how the EPA rigs such analysis, it claims that 15% of pregnant women in Wisconsin catch and eat 300 pounds of lake fish a year and thus fewer newborns would be exposed to the toxic substance in utero. That’s a lot of fishing by pregnant women.

But here’s the, er, catch. Justice Scalia’s opinion says the agency can’t regulate without considering costs, but his decision also says the EPA can still decide what counts as a cost. 


And sure enough, Justice Elena Kagan ’s dissent offers the EPA a soft-landing path for future law-writing. She does not say EPA can ignore costs altogether. But she and the three other liberals would have blessed the mercury rule because the EPA would allegedly scrutinize costs at some indeterminate point, eventually, down the line.

So while Michigan is a welcome rebuke to EPA arrogance, presumably the agency can still do most of what it wants as long as it claims to have considered costs. In any case, most of the utilities targeted by the EPA rule have already shut down those coal plants or spent billions to comply. They won the legal battle but lost the climate war.

Which is why Justice Clarence Thomas ’s concurring opinion deserves a larger audience. He makes a provocative case that the Court’s 1984 decision in Chevron v. Natural Resources Defense Council is unconstitutional. Under what has become known as “Chevron deference,” the Court defers to executive interpretations when laws are ambiguous. Justice Thomas writes that this has become a license for the executive to usurp legislative powers that are supposed to be vested in Congress.

“Perhaps there is some unique historical justification for deferring to federal agencies, but these cases reveal how paltry an effort we have made to understand it or to confine ourselves to its boundaries,” Justice Thomas writes. “Although we hold today that EPA exceeded even the extremely permissive limits on agency power set by our precedents, we should be alarmed that it felt sufficiently emboldened by those precedents to make the bid for deference that it did here.”

That’s an especially apt point coming in a year when the Supreme Court seemed to abdicate much of its obligation to police the Constitution’s separation between the executive and legislative power. A future Court ought to revisit Chevron deference in what has become an era of presidential law-making.

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