Just a little over a year since EPA Administrator Gina McCarthy announced the Obama administration’s Clean Power Plan proposal, which was aimed at cutting carbon pollution from existing power plants, the Supreme Court blocked a less-sweeping, earlier rule targeting mercury and other air pollutants by a vote of 5-to-4 in Michigan vs. Environmental Protection Agency. The court did not strike down the rule, but did say that EPA would need to rewrite it and take implementation costs into consideration.
Michigan’s Attorney General Bill Schuette celebrated the ruling, claiming it was “a victory for family budgets and job creation in Michigan. The court agreed that we can and must find a constructive balance in protecting the environment and continuing Michigan’s economic comeback.”
In a statement, EPA spokesperson Melissa Harrison said the agency "is disappointed that the court did not uphold the rule,” adding that since the rule was enacted, “investments have been made and most plants are already well on their way to compliance.”
Industry groups and a number of states complained that EPA had failed to take the implementation costs into consideration, and the Supreme Court agreed.
“It is not rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits,” wrote Justice Antonin Scalia for the majority.
U.S. Chamber President and CEO Thomas J. Donohue commented: "The Supreme Court made it clear that EPA cannot turn a blind eye when it imposes massive costs on our economy in return for minimal environmental benefit. The decision affirms the common sense principle that Congress requires agencies to consider the consequences of regulations that they impose on businesses and consumers.
Claiming the Clean Power Plan also reaches beyond the agency's statutory power, he said the mercury rule at issue in the decision “has already shut down dozens of power plants that provided affordable and reliable electricity. Our nation simply cannot afford to lose even more electricity generation at the hands of an out-of-control EPA.”
EPA claimed the benefits – both in terms of healthcare and other costs – would result in billions in savings. Industry groups claimed the financial burden outweighed the benefits by billions.
Karen Kerriganis, president and CEO of the Small Business & Entrepreneurship Council, called the Supreme Court’s decision “a relief to small business owners who remain deeply concerned about the full slate of EPA regulations, either in the works or finalized, that impose burdensome red tape and costs. Costs matter to small businesses, and the Supreme Court has ruled that costs need to matter to EPA regulators … It only makes sense for the EPA to conduct proper cost-benefit analyses, and listen to small business owners in all their rulemakings. Regulatory accumulation is crushing small businesses, hurting job growth and our nation's competitiveness.”
In her dissent, Justice Elena Kagan wrote: “The agency acted well within its authority in declining to consider costs at the opening bell of the regulatory process given that it would do so in every round thereafter — and given that the emissions limits finally issued would depend crucially on those accountings.”
When the Clean Power Plan was announced on June 2, 2014, McCarthy commented, “Climate change, fueled by carbon pollution, supercharges risks to our health, our economy and our way of life. EPA is delivering on a vital piece of President Obama's Climate Action Plan by proposing a Clean Power Plan that will cut harmful carbon pollution from our largest source – power plants.” The agency noted that power plants are the single largest source of carbon pollution in the United States.
According to McCarthy when the rule was announced last year: “We don't have to choose between a healthy economy and a healthy environment. Our action will sharpen America’s competitive edge, spur innovation and create jobs.”
It remains to be seen if or how EPA changes its approach to the Clean Power Plan and the regulation of carbon dioxide based on the recent Supreme Court ruling on mercury emissions. In August 2014, 12 coal-producing states filed a lawsuit against EPA in an effort to put the brakes on the plan and that case is making its way through the courts.