EPA has proposed to revoke the Trump administration finding in 2020 that it is not appropriate and necessary to regulate emissions of air toxics from coal- and oil-fired electric generating units. Instead, EPA proposes to reaffirm its 2012 and 2016 determinations supporting such regulation.
This is not surprising and should not be controversial. It may seem odd that I’m citing to the Edison Electric Institute twice in one week in support of EPA regulatory authority, but E&E News (subscription required) does quote EEI president Tom Kuhn as supporting the determination. I’ll therefore just briefly touch on three noteworthy aspects of EPA’s proposal:
- EPA has rerun the numbers and found both that the costs of the MATS regulations were substantially overestimated the first time around and that the benefits of the regulations were underestimated. Thus, the rule looks even more “appropriate” now than it did in 2012 or 2016 or 2020.
- EPA’s “preferred methodology” remains a “totality-of-the-circumstances” approach, rather than a pure cost-benefit analysis that monetizes everything. I’m still hardcore on cost-benefit analysis. My view remains that, if EPA finds that the costs of a regulation will be $X and EPA decides to go forward and regulate, it is implicitly saying that the benefits of the regulation exceed $X. Wouldn’t it be better if EPA were explicit and said why it concluded that the benefits exceed $X?
- EPA is very much taking a belt and suspenders approach here. First, regulation is justified under the totality-of-the-circumstances” approach. Second, if it were to do a pure cost-benefit analysis, the rule would be justified there as well. Third, the co-benefits are massive, further justifying the rule. Fourth, EPA doesn’t really even need to look at co-benefits, because the cost of regulation is so much less than originally thought and the benefits purely from reductions in mercury and air toxics emissions are so much greater than previously thought.
I’m going to go out on a limb and say that, not only is EPA right, but that it will win in the courts if the final rule is challenged.