In February 2022, the Environmental Protection Agency (EPA) proposed: (1) to revoke its May 2020 finding that it is not appropriate and necessary to regulate coal- and oil-fired electric utility steam generating units (EGUs) under Clean Air Act (CAA) Section 112 (2020 Action), and (2) to reaffirm the Agency's April 2016 finding that it remains appropriate and necessary to regulate hazardous air pollutant (HAP) emissions from EGUs after considering cost (2016 Supplemental Finding). Our comments on the Proposal explain why EPA should finalize both these actions as consistent with the Clean Air Act, case law, executive directives, principles of sound economic analysis, and past agency practice.
In 2012, EPA finalized a finding that it was appropriate and necessary to regulate HAP emissions from EGUs and, at the same time, issued emission standards pursuant to Clean Air Act Section 112(d) (the Mercury and Air Toxics Standards or MATS). In Michigan v. EPA, the Supreme Court subsequently remanded the appropriate-and-necessary finding on the grounds that EPA failed to consider costs before making it. Accordingly, in 2016, EPA found that it was appropriate and necessary to regulate mercury and other toxic emissions from coal- and oil-fired power plants, even after taking the costs of such regulation into account. In making this finding, the agency relied in part on a regulatory impact analysis showing that health benefits of its Mercury and Air Toxics Standards (“MATS”) would “exceed the costs by 3 to 9 times.”
In 2020, EPA withdrew its 2016 Supplemental Finding that it is “appropriate and necessary” to regulate power-sector emissions of mercury and other “air toxics” under the Clean Air Act. The 2020 Action claimed that the rule’s cost-benefit analysis improperly relied on “co-benefits” from particulate matter reductions that would occur as a necessary consequence of the steps plants took to reduce their mercury and air-toxic emissions. We submitted comments explaining that the Clean Air Act does not require EPA to ignore co-benefits when making an appropriate-and-necessary determination. Furthermore, ignoring such benefits is an unreasonable exercise of agency discretion, because it is inconsistent with relevant case law, longstanding executive guidance, decades of administrative practice, and sound economic principles.
In our comments on the 2022 Proposal, we explain why EPA is properly revoking the 2020 Action because the 2020 Action treated co-benefits unreasonable, failed to adequately respond to comments on the extent of direct unquantified benefits, and inadequate justified the agency’s change in position from 2016 and earlier. Our comments further explain that EPA’s 2022 Proposal to reaffirm the 2016 Supplemental Finding is lawful and appropriate. The comments support the 2022 Proposal’s (1) consideration of direct unquantified benefits, (2) consideration of co-benefits, (3) justification of the finding on the basis of both the original record and new evidence, and (4) inclusion of a cost-benefit analysis. These comments additionally note that any criticisms of the use of the Social Cost of Carbon to calculate the co-benefits of reducing greenhouse gas emissions are not relevant because the finding is justified without their consideration.
Additionally, our comments further recommend that EPA withdraw its 2020 Risk and Technology Review (RTR) due to its unsupported conclusions and perform a new RTR review that accounts for the distributional impacts of residual risk remaining after implementation of the Mercury and Air Toxics Standards.