The Facts Behind the EPA
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The Facts Behind the EPA

How the agency is using fuzzy math to justify a costly regulation

On Thursday, the Environmental Protection Agency (EPA) put a regulation on the books that will cost $10 billion a year and will do almost nothing to accomplish its aim of improving public health. It is merely another example of the EPA’s politicization of science in a continued effort to bypass Congress to regulate greenhouse gas and eliminate coal.

The “Mercury and Air Toxics Standards” (MATS) is the first of its kind to require installing expensive equipment on over 700 power plants. It has been estimated that this, and other related regulations, will shut down nearly ten percent of coal generating electricity in the country. This could be considered worth the cost if the regulation produced a significant impact on public health.

Clean air is an important aspect of a healthy society and its economy. And mercury, when exposed at high concentrations, is a dangerous neurotoxin. But despite its name, the regulation does almost nothing to reduce mercury or toxic emissions. Less than one-tenth of one percent of the regulation’s benefits come from reductions in mercury. But this fact has not stopped the EPA and its supporters from exaggerating the regulation’s benefits.

EPA Administrator Lisa Jackson said of the rule, “By cutting emissions that are linked to developmental disorders and respiratory illnesses like asthma, these standards represent a major victory for clean air and public health – and especially for the health of our children.” The Center for American Progress claims that “slashing mercury and other contaminants will save 11,000 lives annually” and “provide economic benefits” that the EPA estimates to be between $33 and $90 billion. With these kinds of figures, surely mercury exposure is an epidemic destroying our economy and families.

Hardly. For a regulation that will cost $10 billion a year, the EPA estimates a benefit of only $500,000 to $6 million in benefits from the reduction of mercury.

So how does one get from $6 million to $90 billion in benefits? The answer lies in what is essentially a bait and switch accounting trick at the hands of the EPA. Almost all of the regulation’s “benefits” come from the reduction of soot. Soot, or “particulate matter,” develops both naturally from forest fires, volcanic ash and through man-made processes including cars, power plants, and even dust from unpaved roads. Even if the reduction of soot was an appropriate use of industry and taxpayer resources, there are three main problems here.

First, the EPA already regulates soot through other national standards. Second, since MATS focuses on reductions of mercury and toxic emissions, the EPA can only count health benefits for reductions in soot already below the level it currently considers safe through soot national standards — otherwise they would be double counting.

Third, if the EPA can identify up to $90 billion in health benefits from one set of regulations, one could logically conclude that the EPA should spend more time focusing on the reduction of soot from all industries across the country. But the EPA isn’t doing that.

Under the Clean Air Act, the Agency is required to review current science every five years and set standards accordingly. The EPA missed this deadline in October and announced last month that it would delay setting new standards until June 2013. The Agency stated that reviewing all of the relevant science associated with exposure to soot is “a massive undertaking.”

The EPA’s estimates for MATS are based on two cherry-picked studies that affirm the data that toe the line of the Agency’s objectives. Harvard toxicologist Dr. Julie Goodman recently told a House committee that “the fact that EPA only considered studies that suggested an association [between soot reductions and health] means that it conducted a biased assessment of the available data.” She noted that “dozens of other studies are available and many report no such correlations.”

MATS claims to target one pollutant but draws all of its benefits from another pollutant that is already below EPA-approved safe levels. The air is cleaner than it’s ever been, but at $10 billion a year, MATS will be the most expensive EPA air regulation ever. Last week, the closure of nine power plants in four states was announced directly because of the regulation, and more are looming. Affordable energy is key to a recovering economy and when the costs and benefits are weighed, it’s clear that this regulation’s costs are enormous and the benefits to society are minimal at best.

Adam Peshek is a research associate at the Reason Foundation.