US Supreme Court Review of EPA Mercury Rule Exposes Fatal Flaws In Gov. Christie’s Environmental Policy

Christie’s craven policy puts industry profits above the health of NJ residents

Gov. Christie doesn’t want to talk about any of this and he’s happy that these extremely controversial issues remain buried in the regulatory weeds and DEP bureaucracy, places where NJ’s press corps dare not go.

Yesterday, in writing about the US Supreme Court’s review of an industry challenge to EPA’s mercury emission standard for power plants, I committed the same sin that I blast the NJ press corps for (e.g. all superficial politics, no policy).

I made a political argument that Gov. Christie was driven by his 2016 Presidential primary political ambitions in making a decision not to join with neighboring states in support of the EPA regulation.

So today, unlike the NJ press corps, I followup to explain why the decision – while politically expedient – also was consistent with the Gov.’s environmental policy.

This is the legal issue before the US Supreme Court in the mercury standard:

Whether EPA permissibly declined to consider the costs of regulation when it made its threshold determination to regulate hazardous air pollutants from power plants.

But that narrow legal question has far broader policy implications, which we now turn to.

• Role of the state’s

The role of State’s is under attack by industry and their backers in Washington, who seek to limit and eliminate State “laboratories of democracy”, particularly with respect to establishing and enforcing State environmental standards that are stricter than national minimums.

That is what the preemption debate is about in the hugely controversial federal chemical safety bill currently under debate in Congress, carrying the Orwellian name of Frank Lauternberg. That bill would federal preempt – or legally prohibit – state’s abilities to regulate chemical safety.

Gov. Christie’s “federal consistency” policy is the flip side of that same industry federal preemption coin.

With no public debate, unilaterally, and via Executive power, Gov. Christie has stood the historic federalism framework on its head by by curbing regulations that are needed to implement State laws to be “consistent” with federal minimum.

Christie has adopted, by Executive Order #2, a “federal consistency” policy that actively discourages stricter NJ State standards as one means of providing “regulatory relief”:

State agencies shall, when promulgating proposed rules, not exceed the requirements of federal law except when required by State statute or in such circumstances where exceeding the requirements of federal law or regulation is necessary in order to achieve a New Jersey specific public policy goal.

So, of course, Christie doesn’t want to talk about a 15 State initiative that is based on the opposite of his policy: State leadership and strict standards.

The Supreme Court mercury case highlights the critically important role of the State’s in advancing public health and environmental protections.

As the State Attorneys General noted, the States acted aggressively to fill the void created by federal EPA abdication:

Faced with ongoing delays in the promulgation of Section 112 emission standards for power plants, many of the undersigned states implemented comprehensive controls on power plants within their own borders. Between 2000 and 2010, at least fifteen states [including NJ] enacted regulations requiring coal-fired power plants within their borders to reduce mercury emissions.

The State standards were enacted years BEFORE EPA finally acted and the State standards are far more stringent and protective of public health than the EPA standard.

As NJ based PSEG noted in their legal filing to the Supreme Court, the EPA federal standard is far less stringent that State standards and the standard EPA was legally authorized to adopt under the Clean Air Act:

Many states impose more stringent pollution control requirements than their neighbors because these controls are needed to attain air quality standards or to serve some other public health goal.  ...

EPA’s nearly exclusive use of Floor Standards is significant for another reason: it contradicts petitioners’ portrait of an agency determined to regulate as aggressively as possible. Had that been EPA’s motivation, EPA would certainly have adopted more aggressive emission standards under the authority of Section 112(d)(2). 42 U.S.C. § 7412(d)(2). That provision consigns the stringency of emission standards to a series of EPA administrative judgments about achievability, cost, non-air-quality health and environmental impacts and energy requirements, and even expressly authorizes a prohibition on hazardous emissions. .. Instead of exploiting this potent statutory authority to adopt more stringent standards, EPA imposed the least stringent standards the statute allows. 

NJ was one of those States that acted BEFORE EPA and more aggressively than EPA.

On August 1, 2005, DEP Commissioner Campbell proposed mercury power plant emission standards and those rules were adopted by DEP Commissioner Lisa Jackson on September 5, 2006.

Revealingly, Lisa Jackson signed a stricter mercury rule as NJ DEP Commissioner than the rule she signed six years later  as EPA Administrator.

Gov. Christie ignores all this NJ historical State leadership on mercury and strict environmental regulation because it reveal just how bad his own policy is.

It is simply remarkable that NJ’s largest polluter, PSEG,  – with facilities in the State’s Top 10 carbon polluters – is more supportive of an EPA regulation than the Governor of the State of NJ.

[Note: equally remarkable: PSEG unsuccessfully tried to convince Christie not to roll back NJ’s renewable energy goals.]

• Use of Cost benefit analysis

The consideration of compliance costs and the role of cost benefit analysis is the core legal issue before the Supreme Court:

Whether EPA permissibly declined to consider the costs of regulation when it made its threshold determination to regulate hazardous air pollutants from power plants.

Congress directed EPA to consider public health before industry profits in regulating hazardous air pollutants.

But industry is arguing that EPA first must consider costs before deciding whether to regulate.

Governor Christie, again unilaterally, with no pubic debate, and via Executive Order #2, agreed with the industry argument.

Gov. Christie requires cost benefit analysis to be part of any DEP regulatory decisions:

For immediate relief from regulatory burdens, State agencies shall:

[a. – c.]

d. Employ the use of cost/benefit analyses, as well as scientific and economic research from other jurisdictions, including but not limited to the federal government when conducting an economic impact analysis on a proposed rule. 

So, of course Gov. Christie does not want to have any public discussion of how his craven policy puts industry profits above the health of NJ residents.

• Abuse of Cost benefit analysis

Cost benefit analysis is an economic tool that historically has been used by industry to delay, weaken, and kill regulations that are designed to protect public health and the environment.

The tool is inherently biased because many health and environmental benefits can not be quantified or are difficult to quantify or are excluded altogether from traditional costs benefit analyses.

In addition to being biased and having questionable moral or ethical implications with respect to setting an economic value of people’s lives, CBA implicitly privatizes the commons and defines everything as a market commodity. On top of all that, CBA can be abused.

Since we are uncomfortable talking about a reduction in children’s brain function as a cost of doing business, we’ll let the lawyers from NJ based PSEG explain how cost benefit analysis was abused in this case:

Petitioners’ arguments are premised on a mischaracterization of the economic consequences of the Rule and EPA’s approach to benefit-cost analysis. The three petitioners’ briefs are intended to create the misapprehension that EPA found that the Rule would create only a few million dollars of benefits. The real story is quite different: EPA determined that the benefits of the Toxics Rule will be $37 to $90 billion, at least triple the costs of the Rule and Table 2. Petitioners’ rhetoric is not based on a comparison of all benefits to all costs, as proper economic analysis requires. Instead, petitioners exclude all unquantified benefits, and all quantified benefits other than the benefits of avoided IQ loss for children exposed to mercury through recreationally-caught fish. Nowhere do petitioners offer a legal or scientific rationale for ignoring over 99% of the benefits of the Toxics Rule.

We have made exactly the same argument and explained how the Christie administration was abusing cost benefit analysis to exclude benefits, specifically with respect to blocking off shire wind, see:

• Wind Debate Totally Ignores Climate Change and Environmental Benefits

Again, of course Gov. Christie doesn’t want to talk about any of this and he’s happy that these extremely controversial issues remain buried in the regulatory weeds and DEP bureaucracy, places where NJ’s press corps dare not go.