In the News

“The vast majority of emissions the EPA sought to regulate it can regulate,” Professor Richard Revesz, director of the Institute for Policy Integrity at the New York University School of Law, told reporters June 23.

“The only thing that EPA could have done if it had won across the board that it won’t be able to do now is regulate another 3 percent of emissions,” said Richard Revesz, a New York University School of Law professor who filed a brief support EPA in the case. “That’s all that’s at stake.”

“This is not doing much of anything to hobble EPA,” explains Richard Revesz, director of the Institute for Policy Integrity at the New York University School of Law, adding: “Nothing that is being done today calls into question the EPA’s ability to regulate power plants, both new and existing, under section 111 of the Clean Air Act.”

The court’s decision doesn’t greatly affect the scope of EPA’s permitting authority, said Richard Revesz, dean emeritus at the New York University School of Law and director of the Institute for Policy Integrity.

Others say the proposed emissions cuts are precisely what’s needed to boost carbon capturing.

“There has never really been a financial incentive to develop carbon-capture-and-storage technology because facilities could just pollute for free,” said Michael Livermore, an associate professor at the University of Virginia School of Law.

“Why spend a billion dollars developing a new technology to cut pollution that you don’t have to pay for? It doesn’t make any financial sense.”

Who “wins” as a result of EPA’s proposed regulation of carbon emissions from existing power plants? Society at large. As the Regulatory Impact Analysis accompanying EPA’s proposal makes clear, the social benefits of reducing power plants’ emissions greatly outweigh the costs. EPA estimates that total compliance costs will top out at $8.8 billion in 2030 (and that’s assuming that states choose the pricier option of solo compliance rather than entering into cost-lowering regional agreements). Nine billion may sound like a hefty price tag, but it is dwarfed by an estimated $31 billion in climate benefits that will be generated by the rule’s carbon reductions.

The EPA estimates air-quality improvements from lower levels of fine particles and ozone precursors will prevent between 2,700 and 6,600 premature deaths during 2030, accounting for between $27.3 billion and $66.7 billion in benefits.

The formulas for quantifying the impact of air pollutants such as fine particles and ozone on asthma and other ailments are well-established, said Jack Lienke, a legal fellow at the New York University Law School’s Institute for Policy Integrity.

“If you’re going to perform a cost-benefit analysis, you have to attempt to quantify the benefits as well,” he said. It’s “not unusual” for the EPA to count such ancillary benefits along with indirect costs in making a cost-benefit determination, citing a regulation requiring reductions in mercury emissions as a precedent.

EPA has taken a number of steps to shield its newly proposed rule to limit greenhouse gas (GHG) emissions at existing power plants from inevitable legal challenges, an effort that one observer says appears aimed at preserving as many portions of the emerging policy as possible should federal courts vacate them.

“They might not say it explicitly, but the notion is they’re trying to ensure if you remove one Jenga piece from this stack, the whole thing doesn’t collapse,” says a source with the Institute for Policy Integrity (IPI) at New York University law school.

States have wide latitude to meet their carbon reduction targets under the proposed rule, with electrical-sector carbon offsets, interstate emissions trading, renewable energy and energy efficiency all viable options, said Jack Lienke, a legal fellow with the Institute for Policy Integrity. Some may find that running natural gas generators more — and coal plants less — represents their least-cost option to cutting carbon emissions, while others may choose to switch from fossil fuels to wind and solar power, he said.

Nor are proposed reductions uniform across the states. “The rules look at the existing power mix. They take it into account that some states are more fossil fuel-dependent than others right now,” Lienke said.

Another recent Supreme Court decision restoring the EPA’s Cross-State Air Pollution Rule, which had been vacated by a lower court, also indicates the agency is due deference when crafting cost-effective programs to deal with large air pollution issues, Michael Livermore, associate professor of law at the University of Virginia School of Law and senior advisor to the Institute for Policy Integrity, told Bloomberg BNA June 2 (EPA v. EME Homer City Generation LP, 2014 BL 118432, U.S., No. 12-1182, 4/29/14). He said addressing air pollution that blows across lines is analogous to climate change regulation.
“You had a complex environmental problem that has vexed the agency for some time,” he said. “The agency developed a sophisticated regulatory plan based on modeling and the best science and came up with cost-effective emissions reductions and large net benefits and does it in a flexible manner.”