Public health is more important than cost of compliance

The Supreme Court ruling in Michigan v. EPA is not as dire for environmentalists as it could have been. The ruling does not strike down the Environmental Protection Agency’s (EPA) regulation of mercury and other hazardous pollutants from power plants. The court, instead, ruled that the cost of compliance should have been incorporated at the outset of deciding whether a regulation is necessary and remanded the case back to a lower court for reconsideration. Yet even this narrow decision was wrong — cost-benefit analysis is a flawed measure and not appropriate for environmental regulation.

{mosads}In his majority opinion, Justice Antonin Scalia states, “The Agency must consider cost — including, most importantly, cost of compliance — before deciding whether regulation is appropriate and necessary.” But the primary consideration for the EPA should be what is best for the environment and health of the public, not how much compliance will cost, especially given how flawed cost-benefit analysis is. And, as Justice Elena Kagan notes in her dissent, the EPA considered cost throughout the regulatory process.

The problem with Scalia’s conclusion, and cost-benefit analysis generally, is that it depends on the EPA, or any agency, being able to monetize and calculate things that by their very nature do not have a price tag — such as a clean environment and a healthy population. We calculate health savings through measures such as hospital visits and lost school/work days, but does that really capture the benefit of a healthy population? We know how much it costs to clean up pollution, but we chronically undervalue the cost and health benefits of preventing pollution in the first place.

For example, mercury is a neurotoxin and many studies show the harm mercury exposure causes, including an $8.7 billion loss in economic productivity due to decreased intelligence caused by mercury exposure. But what about the cost that comes from neurological damage, beyond the loss in economic productivity? How do we quantify the damage to quality of life? By using only economic parameters, we reduce a person’s life to only to what he or she contributes to our economy and that is a dangerous, slippery slope.

The EPA’s regulations were implemented because there were no federal standards that required power plants to limit their emissions of toxic air pollutants, such as mercury, arsenic and metals, even though the technology to control these toxics was available. In fact, the EPA set the rules based on the best-performing sources currently in operation and gave power plants four years to implement the controls. In other words, the technology to limit these pollutants already existed and was in operation, proving that the pollution control goal was achievable and not overly burdensome to the industry, a result further validated by the fact that more than 70 percent of plants impacted by the rule are already in compliance.

The Supreme Court was wrong to rule that cost of compliance is the most important consideration. Requiring polluting businesses to stop polluting will of course incur a cost. However, the public is currently bearing the cost and health burden from polluted air and water. It’s only fair that industry begins to pay its fair share.

Cha is a fellow at Cornell University’s Worker Institute.