After the Supreme Court ruled that the EPA did not consider costs at the appropriate stage of its regulatory process when crafting the Mercury and Air Toxics Standards, the EPA was tasked with revising the rule. The agency recently released a supplemental finding that it is appropriate and necessary to regulate hazardous air pollutants from coal- and oil-fired electric utility steam generating units, taking the costs of regulation into account.
We submitted comments to the agency, focusing on the following points:
- First, when assessing the reasonableness of compliance costs for purposes of its “appropriate and necessary” finding, EPA properly relies on projections made in 2011, prior to the promulgation of the Mercury and Air Toxics Standards (MATS).
- Second, while EPA correctly asserts that it is not required to perform a formal cost-benefit analysis to support its “appropriate and necessary” finding, the agency has discretion to do so. As a result, the cost-benefit analysis in EPA’s Regulatory Impact Analysis (RIA) for MATS provides additional, independent support for the agency’s “appropriate and necessary” finding.
- Third, the cost-benefit analysis in the MATS RIA properly considers unquantified benefits of reducing hazardous air pollution.
- Fourth, the cost-benefit analysis in the MATS RIA properly includes co-benefits from particulate matter reductions.
- Fifth, EPA properly ensured that the particulate matter co-benefits included in the MATS RIA were not “double counted” as benefits in RIAs for other rulemakings and should make its approach clear.
- Finally, EPA should avoid suggesting that the use of formal cost-benefit analysis is inconsistent with the consideration of unquantified benefits or distributional effects.