What Just Happened to the Mercury Rule?
Last week’s EPA decision adds insult to injury for our already vulnerable communities.
Perhaps you missed it. There’s a lot going on right now. But amidst all the COVID-19 headlines last week, the EPA decided that it is not “appropriate and necessary” for the government to limit emissions of mercury and other hazardous air pollutants from power plants.
This is not a roll-back of a regulation. It’s more nuanced than that. It’s a high-stakes procedural move with two important implications:
First, it scraps the legal basis for the Mercury and Air Toxics Standards (MATS) which limit hazardous air pollution from coal and oil-fired power plants. Having knocked the legal foundations out from under this important regulation, I think there’s a real risk that power plants will find ways to dial back on compliance in the future.
Second, it sets a dangerous precedent for how the benefits and costs of federal environmental regulations are assessed. The ruling removes significant health benefits from cost-benefit consideration on the grounds that they are not directly targeted by MATS.
This announcement comes at a time when the country is reeling from the global coronavirus pandemic. Protecting public health is top of mind. We’ve all become keenly aware of how actions we take can indirectly protect the health of the most vulnerable among us. With these benefits in mind, we are taking action.
Meanwhile, the EPA has decided that the indirect health benefits of pollution reductions should not be considered in regulatory cost-benefit analysis. This decision departs recklessly from standard practices for responsible public decision-making.
Some colleagues and I recently published this paper (based on our longer report) which points out deep flaws in this EPA decision. The agency’s own Science Advisory Board released a report calling for a “do-over”. Hundreds of thousands of public comments raise concerns. Even the electricity sector stands in opposition. The Trump EPA response: To hell with it. We are pushing ahead.
To understand what this means, we need to remember how we got here.
The Mercury and Air Toxics Standards limits the emissions of mercury and other hazardous air pollutants (HAPs) from power plants. To justify the rule, the EPA must demonstrate that it is appropriate and necessary. Back in 2011, the EPA supported this argument with a detailed analysis that projected big public health benefits from the power plant emissions reductions expected under the regulation. The table below, taken from the 2011 analysis, shows monetized benefits far exceeding the costs.
There were some serious bumps on the road to implementation. But power plants began complying in 2016. The industry has since invested billions to install pollution abatement equipment in order to meet MATS requirements.
Last year, the Trump EPA started working to reverse the appropriate and necessary finding. The agency issued this six-page memo that re-interprets the 2011 cost-benefit analysis. There’s no new information here. The big change is that the “co-benefits” – health benefits that result indirectly from MATS compliance—have been wiped off the cost-benefit board. If we ignore these benefits (row 3 in the table above), MATS appears to fail the cost-benefit test.
There are many reasons to be concerned about this maneuver. Let me unpack three:
- Co-benefits are real benefits
When power plants reduce mercury emissions, they also reduce emissions of precursors to harmful particulate matter (PM). Reducing exposure to small particulates saves lives. These benefits are referred to as “co-benefits” because they are caused by – but not directly targeted by – the regulation.
If a policy will generate big health benefits, directly or indirectly, these should be counted. Federal agencies are under Executive Order to weigh the available evidence on all significant costs and benefits in their regulatory assessments. This is also required under the EPA’s own guidelines for economic analysis.
An official decision that eliminates or reduces consideration of co-benefits sets a troubling precedent for future regulatory decisions. If this approach becomes standard, it becomes much more difficult for the EPA to justify socially beneficial regulations. Greenhouse gas emissions regulations- which can deliver significant reductions in local air pollution- are one important example.
- Direct benefits estimates are outdated and incomplete
The 2011 direct benefit projections that serve as a basis for last week’s decision reflect only one health benefit from reducing mercury emissions: improvements in the IQs of children whose families catch and eat freshwater fish. This narrow focus explains why those 2011 direct benefits estimates are so small.
A decade later, we know a lot more about how power-plant mercury accumulates in commercial seafood consumed by many Americans. In addition, recent research suggests that mercury exposure could cause cardiovascular problems. If these additional health impacts were accounted for, the direct benefits of HAP reductions would look quite different. But the 2020 EPA decision is still referencing outdated and incomplete 2011 benefits numbers.
- Costs are largely in the past
To comply with MATS, billions have been invested in equipment that scrubs harmful pollution out of power plant emissions. In other words, the investment costs that comprise the majority of the 2011 cost projections have already been incurred. Going forward, the costs we need to consider are the costs of operating this pollution abatement equipment. Estimates I’ve seen range from $1.80/MWh to as high as $7.92/MWh (a non-trivial increase in coal-fired electricity generation costs).
By dismissing the legal basis for the rule, MATS is left wide open to the challenge that the pollution controls are no longer legally required. If I were a coal plant operator, I might read between the lines of this decision and conclude that the EPA is not so concerned about enforcing MATS going forward.
Coal plants across the U.S. are struggling to compete with natural gas and renewables. If MATS requirements are not there to keep pollution controls switched on, plants in competitive electricity markets will have an incentive to turn this equipment off to save a few dollars/MWh. If this happens, downwind communities will pay a hefty health price.
Adding insult to injury
You would think that a high-stakes regulatory decision like this would merit an analysis update given that almost a decade has passed since the original assessment was done. The reams of data and scientific evidence that have accumulated since 2011 could provide a much more accurate evaluation of the rule’s benefits and costs, in addition to a more informed basis for re-evaluating the appropriate and necessary finding. Instead, this EPA has dusted off a stale 2011 analysis, deleted the co-benefits, and declared the rule unnecessary and/or inappropriate.
The timing of this decision feels particularly callous because the communities that have historically been most exposed to high levels of air pollution are the ones being hit hardest by the COVID-19 crisis. This recent study suggests that even small increases in long-term exposure to particulate matter significantly increase COVID-19 fatality risk.
The Trump administration assures us it is putting “safety first” during this COVID-19 pandemic. But in the background, Trump appointees have been doing quite the opposite with decision after decision after decision. This MATS reversal has the potential to do real damage. But if there is good news to be found in this story, it’s that it will take time to play out. One more reason to work hard to course correct in November.
Keep up with Energy Institute blogs, research, and events on Twitter @energyathaas
Suggested citation: Fowlie, Meredith. “What Just Happened to the Mercury Rule?” Energy Institute Blog, UC Berkeley, April 20, 2020, https://energyathaas.wordpress.com/2020/04/20/what-just-happened-to-the-mercury-rule/
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Re: Mark Nelson. Nice right wing attack having no place here. Check out the hospital costs for those under 65 who are not dying as rapidly. But they are dying. Are you one of those who complained about Obama’s death squads?
Excellent and important policy analysis. As someone who has published cost effectiveness analysis in the public health area, I concur with the validity of points you make and hope this blog can be distributed widely as an easily understandable example of the damage caused by the current administration’s regulatory rollbacks. As you point out–this is only minimally cost savings–not to mention propping up an uneconomic and polluting fuel.
I’m now involved at the CPUC with promoting renewable energy, and it has been an uphill battle to get health benefits considered in their cost-effectiveness analyses, even in a venue more concerned with their residents’ health than the Trump EPA. While academic economists understand the relevance and accuracy of externalized health costs from gas generation, the investor owned utilities have been obstructing a California legislative mandate (since 1990!) to include health costs. Furthermore, analysts expert in the energy area tend to be somewhat “skeptical” of and/or less familiar with health benefit data. Maybe this is a topic that warrants BERC attention?
Claire Broome, MD
Adjunct Professor, Emory University School of Public Health
So long as co-benefits aren’t double or triple counted on other regulatory actions, your assessment seems reasonable. The age old question of when to refresh costs and benefits is difficult. Cherry picking of the cost or benefit side will change the outcomes. Perhaps there needs to be a schedule instead of “evaluator’s choice.”
Last, I’m curious how the Feds and States managed to destroy the economy over COVID with what appears to be no B-C analysis whatsoever. Their move to shutdown the economy was not at all examined to see if the $5T, $10T or perhaps $20T in current and long term damage of their flawed strategy was remotely cost-effective. Even simple math likely would have shown that shelter-in-place for 65+ and compromised people, with continued operation of the economy to the fullest extent possible using mitigation measures would have been far more cost-effective.
If we’re going to use B-C, then let’s be consistent across the economy and use it on all actions.
The benefit cost analysis on controlling the pandemic by restricting economic activity is fairly straight forward at two levels:
1) Various studies have shown that recessions, even severe ones, increase the mortality rate by 10,000 to 20,000. The current mortality rate in US is at an annual pace of 750,000 (2,000 per day), while the forecasted uncontrolled deaths was 2 million or more. Further predictions forecast a reduction from this which should be substantially more than 20,000.
2) We either reduce economic activity now, or later when the pandemic becomes uncontrolled and people stay home out of panic. This is how the scenario played out with the Spanish flu to a large degree. It’s not a case of either/or but rather when, so there’s really no counterbalancing “cost.” This is the myopia that those object to social distancing and shelter in place can’t envision.
“Coal plants across the U.S. are struggling to compete with natural gas and renewables…”
In New York, the variability (and scarcity) of renewable solar and wind has led to a growing dependence on “fuel secure” plants – plants that burn gas when it’s available, and oil when it’s not. Now, respiratory issues from NOx, SO2, and PM2.5 emitted by these plants have been linked to a corresponding vulnerability to COVID-19, particularly in the outer boroughs of New York City.
Combined with an estimated 3% of natural gas leaked into the atmosphere, the health benefits of renewables + gas + oil over coal are debatable. If protecting public health is truly top of mind, New York wouldn’t be swapping one toxic fuel for another.
Do you have a publication or cite on how these public health impacts in New York have increased with the retirement of coal plants? (There are local impacts of gas plants–it’s the claim of an incremental increase that I’m looking for.)
And yes, we want to reduce and phase out natural gas use, which is why we are pursuing cost-effective technologies such as renewables and storage to address this issue. If and when nuclear does become cost effective, it can be included in this mix, but that is yet to be demonstrated.
“There are local impacts of gas plants–it’s the claim of an incremental increase that I’m looking for.”
When 2 billion watts of carbon free energy are replaced with fossil fuel gas, oil, and diesel fuel, you will get your incremental increase in public health impacts – although and we won’t know exactly what they are until it’s too late, will we (with a gas plant longevity of 43 years, your “phase out” won’t begin for at least four decades)?
1) CPV Valley Energy Center 680 MW (Wayawanda) – online 10/2018
Natural gas / diesel
2) Cricket Valley Energy Center 1,100 GW (Dover) – online 2020
Natural gas combined cycle
2) Bayonne Energy Center II 120 MW uprate (Bayonne, NJ) – online 2020
Natural gas / fuel oil
“Renewables + storage” remains an imaginary construct of renewables activists for reasons I’ve already explained.
There is nothing more cost-effective, carbon-free, and healthful than keeping Unit #2 of Indian Point Energy Center online beyond its scheduled April 30 shutdown. It generates 25% of NYC electricity safely, economically, and with zero carbon emissions, and those are precisely the reasons it’s being shut down:
“Two top former Cuomo aides to New York Governor Andrew Cuomo worked with a major Cuomo campaign contributor, the natural gas company Competitive Power Ventures, Inc. (CPV) to close Indian Point nuclear plant.
The New York Times reported today that Indian Point’s operator had agreed to close the plant, bowing to intense pressure from Cuomo. Mention of the episode is an a federal criminal indictment filed by Preet Bharara, the U.S. Attorney in Manhattan, on September 22, 2016.
‘Based on my review of publicly available documents and my interviews of witnesses,’ wrote the US attorney, ‘including employees [of CPV], the importance of the plant [CPV Valley Energy Center] to the State depended at least in part, on whether Indian Point was going to be shut down.'”
http://environmentalprogress.org/big-news/2017/1/6/natural-gas-promotor-at-center-of-new-york-corruption-scandal-pushed-to-close-indian-point-nuclear-plant
From Sacramento to Albany, corrupt natural gas interests are having a field day. Two weeks ago:
With a Return to Fracking, Gov. Gavin Newsom Shows His True Oily Colors
https://www.commondreams.org/newswire/2020/04/06/return-fracking-gov-gavin-newsom-shows-his-true-oily-colors
You didn’t answer the question and rambled on about a completely different topic. You were making claims about how natural gas used to replace coal has detrimental local health impacts, and then replied with examples of natural gas replacing nuclear. These are not the same thing. Apparently you don’t have an answer to my question about incremental health impacts.
I’m sorry if my answer didn’t make sense to you, but it’s hard to provide a sensible answer to a nonsensical question. For example: you ask for evidence of an “incremental increase in health impacts”:
Incremental adj. “relating to or denoting an increase or addition, especially one of a series on a fixed scale.”
Health impacts do not occur on a fixed scale. Like temperature or speed, health impacts are described by a continuous function, only divided into specific quanta for purposes of approximation. If you asked me for an incremental value, like “casualties”, I could answer your question and would. Assuming, of course, there was any indication you had a valid point to make.
Your understanding of the word “incremental” is apparently as confused as your understanding of the word “marginal,” or “capacity”, in other contexts. Words matter.
By the way, I’m still waiting for your response to Michael Moore’s “Planet of the Humans”, which effectively confirms investment in renewable energy is worse for climate change than doing nothing. https://planetofthehumans.com/
?
If you didn’t understand the question, you probably don’t understand the issue.
I answered about Moore. Many others agree–he’s not God.
Thank you Meredith and Haas team for this. Mercury and Air Toxics, the name says it all. Hopefully, this post will attract attention from partisans of evidence-based regulation (why this does not include everyone is a shame) and from the media who report on it. One observation: in 2019, EPA released guidance on Benefits per kWh (known as BPK) designed to illuminate environmental co-benefits of energy efficiency and other distributed resources. This is evidence of some environment sensitivity remaining in the agency.