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Supreme Court: EPA failed to conduct cost-benefit analysis with emissions regulation

Readers all heard earlier this week about the United States Supreme Court’s recent decision regarding marriage rights, but the court also issued other opinions as well. One of these opinions dealt with a challenge to the Environmental Protection Agency’s effort to regulate coal plant emissions of mercury and other pollutants. This effort met with a significant challenge from 20 states and various interest groups.

The regulation aimed to reduce the 2005 carbon emissions level by 30 percent by 2030. The problem, according to critics, was that the costs of meeting that goal would be significant. From a legal perspective, critics argued, the EPA has to take into account the cost of regulations in enforcing the Clean Air Act, from which the regulations would draw their authority. The agency did not do this when it passed the regulation. 

The EPA and critics of the regulation disagreed about the actual costs of implementing the regulation. While critics said it would cost about $9.6 million to manage roughly $6 million in benefits on an annual basis, the agency claimed that the regulation would save tens of billions of dollars. Ultimately, the Supreme Court sided with those who opposed the law, determining that the agency failed to conduct a cost-benefit analysis.

Readers who follow developments in environmental law know that President Obama has more environmental regulations in the works to be released in the next couple months. As things move forward with the administration’s environmental agenda, it will be interesting to see how the recent decision impacts its approach. 

Source: The New York Times, “Supreme Court Blocks Obama’s Limits on Power Plants,” Adam Liptak and Coral Davenport, June 29, 2015. 

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