NCPA - National Center for Policy Analysis

The Facts behind the EPA's Latest Proposal

February 22, 2012

The Environmental Protection Agency (EPA) recently put a regulation on the books called the Mercury and Air Toxics Standards (MATS), which targets power plant emissions of mercury and other toxins. While this stated goal is admirable, in so far as clean air is a crucial component of a nation's health, the regulation is largely misplaced, as it will fail to bring about cleaner air and will be the most expensive air quality regulation of all time, says Adam Peshek, a research associate at the Reason Foundation.

  • By the EPA's own estimation, the total cost of the regulation will be approximately $10 billion per year.
  • MATS will require the installation of expensive equipment on over 700 power plants -- an imposition that, in tandem with several other regulations, will shut down 10 percent of coal generating electricity in the country.
  • This will hamper efforts to create cheaper energy -- a key component to economic recovery.

The EPA justifies the regulation by stating that it will reduce mercury emissions in the air, which are linked to developmental disorders and respiratory illnesses.  However, in their economic assessment of the benefits of the rule, only a tiny fraction was due to reduced toxins in the air.

  • The EPA estimates the economic benefits of MATS to be between $33 billion and $90 billion.
  • However, the benefits due to the reduction of mercury are only estimated by the EPA to be between $500,000 and $6 million.
  • EPA analysts do not rely on reductions in mercury and toxins (the stated purpose of the regulation) in order to achieve the $90 billion economic benefit, but rather claim that reductions in general soot will provide the net profit.

While reducing soot may be justifiable if it is actually dangerous, there remain several reasons why the EPA's method does not make sense in this case.

  • The EPA already regulates the creation of soot through other standards.
  • By including reductions in soot through those other standards, the EPA is essentially double-counting the same benefit and using it to justify two separate regulatory actions.
  • If the true goal is the reduction of soot, other industries should be targeted as well, but as it stand now the coal-firing industry is being singled out.

Source: Adam Peshek, "The Facts behind the EPA's Latest Proposal," Reason Foundation, February 16, 2012.

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