MATS Isn’t Dead Yet – An Assessment of the Supreme Court’s Michigan v. EPA decision

The death of EPA’s Mercury and Air Toxics Standards (MATS) rule has been greatly exaggerated by the popular media following the Supreme Court’s ruling Monday in Michigan v. EPA].  In fact MATS is NOT dead, and only EPA’s initial decision that it is “appropriate and necessary” to regulate coal and oil-fired power plants is remanded for consideration of associated costs – which work EPA has already done (just not at the point when the Court would have liked it to).

In an NPR All Things Considered interview that aired on Monday, I made the point that all of us in the environmental community will do all we can to ensure that the MATS rule’s protections for human health and the environment remain in place while EPA moves forward with a revised appropriate and necessary determination.

The good news:   MATS itself is still in place, and EPA and we are committed to fighting to keep it so, while EPA fixes the appropriate and necessary determination.  See EPA Assistant Administrator Janet McCabe’s blog on the subject.  Petitioners – although not all of them – in the Michigan case asked the Court to vacate the MATS toxic air pollutant limits – i.e. throw them out completely – but the Court did not take them up on that.  Nor did the Court vacate the appropriate and necessary determination – it remanded the rule to the DC Circuit for further proceedings consistent with its holding.  That choice is critical as the rule is estimated to save on the order of 11,000 lives per year.

And, the D.C. Circuit is home to very robust case law supporting maintaining a rule in place during a remand to fix an identified record problem, IF by doing so, public health and environmental protections are preserved.   You might remember that that is what happened to the Clean Air Interstate Rule (CAIR) after that rule was remanded to ‘fix’ identified record problems identified by the Circuit Court in North Carolina v. EPA – CAIR remained in place all through the development of and even the litigation over the Cross State Air Pollution Rule.

MORE good news:  Michigan is a very limited decision, in the sense that it applies ONLY to the appropriate and necessary decision whether to regulate power plants under section 112 of the Act.  It does not affect other industries’ air toxics standards, it does not affect how National Ambient Air Quality Standards are set; and, as noted above, the MATS rule’s emissions limits are still in place.  Finally, it has no direct implications for the Clean Power Plan, under which costs are already a major point of analysis.

And, good news on the practicalities:  Many companies already have installed controls or made other decisions towards implementing the MATS rule (which went into effect fully in April 2015).  And they have done this without our lights going out, or our bills becoming excessively burdensome.

The history of the Act is that initial estimates of the costs of major rules are always conservative – much higher than the empirical costs of compliance. Once a target emissions level is set, industry proves very creative at developing new solutions to meet the requirements cost-effectively. Indeed, EPA now has some empirical cost of compliance data for MATS, to rely on should it choose to do so.  Given that EPA’s estimates in the 2012 Regulatory Impact Analysis already showed the benefits of MATS outweighing costs by a 9:1 ratio, history tells us that an updated assessment will be even stronger if favor of the important public health protections achieved by MATS. These include health and environmental benefits from reducing emissions not only of mercury, but also toxic heavy metals in particulate matter (like arsenic, cadmium and chromium to name a few of many), and acid gases.

Justice Scalia refers to some of these health benefits as “ancillary,” but in fact they are actually direct benefits of controlling the toxics emitted by burning coal and oil to generate electricity – just as the costs of the controls are direct costs. While only some of the benefits can be directly reduced to dollars and cents, make no mistake about it — these benefits exist: they include saved lives, reduced hospital visits due to respiratory ailments, reduced risk of serious neurological disorders, and reduced risk of cancer associated with exposure to the air pollutants in question.  EPA now has an opportunity to drive home that point on remand.

It’s not all roses – there’s some bad news for all of us who care about clean air:  The Court’s opinion suggestsbut expressly does not mandate or even direct a ‘formal cost benefit analysis,’ however.  It will be up to EPA to decide how to consider cost – whether by using the Regulatory Impact Analysis cost assessment or by some other method for assessing the cost-effectiveness of the MATS rule. Observers point out that the uncertainty around this point means that further litigation is almost inevitable.  See Lisa Heinzerling’s blog for the American Constitutional Society on the case.   As she notes, all nine Justices do seem to be saying in Michigan that cost is nearly always relevant to regulatory actions of any magnitude where the statute contains ambiguity or capacious language like “appropriate.”  This might seem common-sense, but it has not been the law for environmental regulation particularly for extremely hazardous substances.

So, what’s next?  CATF will continue to present the strong public health and environmental basis for holding the rule in place while a technicality is corrected.  Here is a possible timeline:

• Within the next 30 days, or so, the Supreme Court will formally send the record in Michigan v. EPA back to the D.C. Circuit Court (where it is known as White Stallion v. EPA), with directions to the Circuit Court to take the next steps in accordance with the Michigan
• The D.C. Circuit panel likely then will seek input from the parties.  You might remember this also happened in response to the Supreme Court’s UARG v. EPA decision last summer vacating and remanding EPA’s greenhouse gas permitting rules.
• The parties will express their opinions to the DC Circuit.
• Once the filings are all in, the Circuit Court panel will deliberate and then issue an Amended Judgment directing the Agency to move forward.

Meanwhile — as EPA already has committed to doing — the Agency can and should begin to move forward on the work it inevitably will need to do in response to the Court’s decision. Clearly MATS isn’t dead at all, and we remain committed to making sure it continues in effect, saving thousands of lives.