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Brief for Challenge to EPA’s Carbon Standards for New Power Plants

The EPA’s Carbon Pollution Standards for New Power Plants limit carbon dioxide emissions from new, modified, and reconstructed plants. A group of state attorneys general and energy companies have filed suit challenging the standards on several grounds. Policy Integrity submitted an amicus brief in support of EPA.

Petitioners contend that the standards are arbitrary because they have no benefits and substantial costs. Our brief shows that this claim is contradicted by the cost-benefit analysis that EPA performed as part of its Regulatory Impact Analysis for the standards. That analysis demonstrates that, if future market conditions are such that the standards impose substantial costs, they will also generate substantial benefits that, under all but the most unlikely scenarios, outweigh those costs. Conversely, if conditions are such that the standards generate negligible benefits, they will also impose negligible costs. There is no plausible scenario in which the standards result in substantial costs but negligible benefits.

Our brief also rebuts Petitioners’ claim that the standards are unlawful because, under the most likely market conditions, they will have a negligible impact on carbon dioxide pollution. EPA identified multiple scenarios in which the standards would generate substantial emission reductions relative to the baseline. In light of these alternative scenarios, the standards serve an important risk-management function, as do a large number of prior regulations from EPA and other agencies that similarly address unexpected but harmful future events.