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The EPA, mercury and the cost of power plant regulation

We frequently write about the ways in which the government regulates business in regards to operations’ impacts on the environment. To a great extent, federal, state and local governments retain the right to both create and enforce such regulations. However, there are times when businesses and other entities understandably question the ability of government to regulate everyday operations. When a significant clash exists between the rights of business and the rights of government to regulate, lawsuits often result.

Earlier this month, the U.S. Supreme Court heard arguments in the case of Michigan v. EPA. The case was filed by 21 states essentially as a joint request that the Supreme Court rule that the Environmental Protection Agency has overstepped its legitimate authority to regulate certain air quality control issues. Specifically, the lawsuit seeks to roll back the EPA’s plan to regulate power plant emissions of arsenic, mercury and other harmful toxins.

The EPA’s proposed emission regulations would cost roughly $9.6 billion annually to implement, according to The Economist. Given that the most direct benefits of the mercury element of the emissions would “only” amount to several million dollars per year, the states involved in the suit insist that the EPA is overstepping its authority to protect the public.

It is worth noting that the EPA estimates that so-called “co-benefits” of the rule would result in between $37 and $90 billion in health benefits annually. The Supreme Court is now charged with determining not only what the potential benefits of the rule are but also whether the EPA is properly utilizing its authority under the Clean Air Act and other laws in the creation and implementation of these regulations. Environmental laws may often be necessary, but their creation and their enforcement can be tricky in more ways than one.

Source: The Economist, “Coal states v Uncle Sam,” March 28, 2015

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