by Justin Pidot, Associate Professor of Law, University of Denver Sturm College of Law
In its last decision of the 2014 term, the Supreme Court decided Michigan v. EPA, ruling that EPA must consider costs before deciding to regulate toxic air pollutants from power plants. Lisa Heinzerling has identified the many questions that remain open in the wake of the Court’s decision. And Dan Farber and Ann Carlson also provide insightful commentary on the meaning of the decision. As all three suggest, the lasting practical effect of the Court’s decision on mercury and other toxic emissions from power plants remains to be seen.
Without retreading ground that has been well-covered already, I want to offer two observations. First, I want to offer some (very cautious) optimism that the legal rule provided by the Michigan v. EPA decision has little effect. Read broadly, the decision could require agencies in many contexts to consider costs before regulating. I’m not convinced, however, that the decision necessarily tells us anything about when agencies must consider costs.
The Court offers several reasons that EPA unreasonably interpreted its authority to regulate power plants without accounting for the billions of dollars of costs such regulation might impose:
First, the Court explains that the toxic air pollution provisions of § 112 of the Clean Air Act differentiate between power plants and other stationary sources. For sources other than power plants, the Act essentially allows EPA to consider, at most, health and environmental effects. In contrast, the Act requires EPA to regulate power plants only if “necessary and appropriate.” This contrast, the Court offers, must mean something.
Second, the Court opines that appropriate regulation generally requires an agency to think about both the benefits of regulation and its cots. This suggests, that could be read to presumptively require agencies to consider costs in making regulatory decisions.