Mercury proposal an affront to economics and to the environment

EPA recently announced that it was considering repudiating the reasoning behind a decision it made under the Obama Administration to regulate mercury emissions from power plants. When issuing the current regulation in 2011, EPA had said that the regulation would cost industry over $9 billion, while the economic benefits would be nearly $100 billion. The document issued last week estimates the costs to be the same but now says that the benefits will only be between $4 and $6 million.

Why the difference? The Obama era EPA included in its benefit estimates what are known as “co-benefits.” When EPA requires power plants to reduce their mercury emissions, they often install pollution control equipment or change their operations in order to do so. These changes reduce not only mercury emissions, but also the emission of other pollutants. Most importantly, they reduce particulate emissions.

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Particulate emissions are particularly important because they have been implicated in increased mortality rates from heart disease and cancer. The current EPA is arguing that these reduced mortality rates should not be counted as benefits because there are other regulations specifically geared toward reducing particulate emissions. If there were lives to be prolonged by reducing particulate matter, those regulations should be readjusted to save those lives.

The issue of co-benefits is a complicated one. The gargantuan estimate of benefits produced by the Obama EPA deserves scrutiny. It may be that some of the benefits claimed may in fact be achieved by other regulations, or that the mortality reductions estimated by EPA are exaggerated.

But there is little doubt regarding two premises. First, the efforts to reduce mercury will also reduce particulate emissions. Second, the reduction in particulate emissions will prolong some lives. 

While the Obama EPA analysis may have overestimated the number of lives saved, the Trump EPA analysis — by implicitly assuming that the number of lives lengthened is zero — certainly underestimates it.

A good cost-benefit analysis should attempt to count all of the major impacts of a regulation. The Trump mercury analysis, clearly violates this fundamental premise.

And this is part of a pattern.

While the war on government and his war on immigration have gotten more publicity, the Trump Administration has waged an equally vigorous war on analysis. The economic analyses his administration has produced in support of deregulatory proposals have regularly been derided by economists and have been the source of numerous setbacks in court.

Good analysis can have significant beneficial impacts on public policy decisions. The cause of policy analysis has advanced throughout the late 20th and early 21st century thanks to bipartisan support. With analyses like the one produced on the EPA mercury regulation, the Trump Administration has put this progress in danger.

Those who criticize analysis, particularly economic analysis, as inherently biased and flawed have been handed a powerful weapon by the Trump Administration. 

Decisions such as whether and how to regulate mercury emissions from power plants are the exact decisions that are best served by careful thoughtful analysis. A thorough analysis can then serve as the basis for a thoughtful debate on the merits of the regulation being analyzed. 

The Trump EPA analysis is neither careful nor thoughtful and is deliberately incomplete. This serves neither the cause of protecting the environment nor the cause of furthering analytically informed decisions.

Stuart Shapiro is professor and director of the Public Policy Program at the Bloustein School of Planning and Public Policy at Rutgers University, and a member of the Scholars Strategy Network. Follow him on Twitter @shapiro_stuart.