EPA’s Utility MACT – More Policy-Driven Science

Today at 2pm, EPA Administrator Lisa Jackson will visit a children’s hospital in Washington, D.C. and unveil the Agency’s new Utility MACT rules. She will stand at a podium, most likely surrounded by doctors and sick children, and proudly announce that starting today, children and pregnant women will no longer have to worry about the main menace being targeted with these rules — mercury. Unfortunately, these rules will have negligible impact on mercury and, as President Obama promised while campaigning, the regulation is really targeted at putting an end to the coal industry in the U.S.

Mercury is a neurotoxin that can harm fetal development and reduce I.Q. in children. It can find its way into bodies of water and accumulate in fish, which has lead health officials, in the name of “better safe than sorry”, to caution women about eating types of seafood when pregnant.

EPA estimates that it will cut mercury emissions by nearly 90% by pressing forward with these rules, which impose $11 billion in annual compliance costs for utilities. It is widely accepted that, at the very least, these compliance costs will pose difficult problems in ensuring that the lights stay on for many Americans.

But EPA says it’s worth it. They proclaim that the rules will eliminate 11,000 heart attacks, 17,000 premature deaths, 120,000 cases of asthma, and an overall reduction of 850,000 sick days per year. Risk analysts nation-wide will cheer at such impressively accurate estimates.

Further, EPA’s cost-benefit analysis, or Regulatory Impact Analysis (RIA), estimates between $53 and $140 billion in annual health benefits thanks to this rule going forward. The only problem is that these benefits have absolutely nothing to do with reductions in air toxics emissions — the entire purpose of the rule. In fact, EPA’s own estimates show benefits of only $500,000 to $6 million per year — less than .01% of the estimated benefits. This is due to the reduction of just one of the toxic air pollutants, mercury.

So where are the benefits coming from? Entirely from particulate matter (PM). PM is targeted by other regulations, but for the past couple of years, EPA has been using it as a way to push through industry-specific regulations that it could never pass on a basic cost-benefit analysis. It’s able to do this by calculating coincidental “co-benefits” of PM for rules that are not targeting PM.

EPA currently considers PM emissions above an average of 15 micrograms per cubic meter (μg/m3) to be harmful to human health. However, EPA has been calculating PM risks as low as 4 and 5μg/m3 — three times below what EPA defines as safe. A key and very dubious assumption being made with this method is that risks to PM are linear to zero. In other words, EPA is assuming that changes in air quality at safe and nearly unobservable levels have the same effect as changes at high levels where legitimate health associations have been determined. David Kreutzer at the Heritage Foundation describes it well:

Suppose a study examined accidents in which four people each fell a distance of 50 feet. If two of the four died, the prediction of what is called a linear-dose response is that for every 200 feet that a population falls, two people will die. This would be averaged out among the population and the distance of falling. For instance, this linear-dose response would predict that for every 400 people who step off a six-inch curb, two will die from the impact. A cost-benefit calculation using this assumption would show that even a small city would save thousands of lives per day by cutting down all curbs. Though stepping out into street may be dangerous for other reasons, dropping down six inches is not the cause of any fatalities. Nor would eliminating curbs reduce any of the other dangers of stepping into the street.

Likewise, the EPA’s analysis of the Utility MACT rule using a linear-dose response is way off base, because existing mercury and particulate levels are more analogous to stepping off a six-inch curb than a 50-foot cliff.

EPA says it will reduce mercury by 90% with these rules. But clearly, based on EPA’s own analysis, this will be 90% from an already negligible amount.

This is just another example in EPA’s long and dubious use of cost-benefit analyses to drive industry specific regulations to eliminate coal. Don’t believe me? Here is then candidate Obama discussing his policies regarding coal:

Adam Peshek is a research associate at Reason Foundation, a nonprofit think tank advancing free minds and free markets, where he focuses on energy and environmental policy.