How Much Is It Worth to Clean Up America's Aging Coal Plants?

Why the vast differences in cost-savings calculations?
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Why the vast differences in cost-savings calculations?
Coal power plant emissions seen above residential blocks from a city during sunrise. (Photo: ldphotoro/Shutterstock)

Coal power plant emissions seen above residential blocks from a city during sunrise. (Photo: ldphotoro/Shutterstock)

The Supreme Court heard arguments yesterday for and against some new, stricter rules for America's coal- and oil-fired power plants. The United States Environmental Protection Agency recently set limits on the amount of mercury and other toxic gases such plants are allowed to emit. Opponents say the so-called Mercury and Air Toxics Standards, which require older plants to install special filters, cost the industry too much.

Of course, expensive regulations can be worthwhile if the benefits are great enough. So the EPA has calculated how much money it thinks Mercury and Air Toxics Standards will save: $37 billion to $90 billion a year. Industry groups and certain U.S. states, on the other hand, say the laws' benefits add up to $4 million to $6 million annually.

That's quite a disparity.

The numbers all come from a cost-benefit analysis the EPA conducted, as required by an executive order President Barack Obama signed in 2011. It sounds sensible and helpful to put numbers on the costs and gains of proposed new laws, but sometimes, providing such estimates is difficult. So the details can get a little funny.

The EPA has calculated how much money it thinks Mercury and Air Toxics Standards will save: $37 billion to $90 billion a year. Industry groups and certain U.S. states, on the other hand, say the laws' benefits add up to $4 million to $6 million annually.

Let's start with the $4 million to $6 million figure, which comes from just one part of the EPA's calculation for the overall value of reduced power-plant emissions for Americans. That, apparently, is the only part opponents to the EPA's laws consider valid. But it's a very strange figure. It refers to the value of the improved health that the EPA expects Americans to enjoy because there's less mercury in any freshwater fish they catch and eat on their own.

If this sounds like missing the forest for the trees to you, you're right. Mercury is truly dangerous, especially to young children and unborn fetuses, but how many Americans really catch and eat so much freshwater fish that they damage their children's IQs?

The problem is that the EPA couldn't calculate the mercury exposures that matter most. The agency couldn't pinpoint exactly how much mercury Americans are exposed to through eating commercially produced seafood—the seafood most people eat, most of the time. There's not enough science and data to make those estimates accurately, the agency reports in another document, its Regulatory Impact Analysis. For example, there's not yet firm science on how concentrations of mercury in the atmosphere translate into concentrations of mercury in open-ocean fish, which include mackerel, swordfish, and tuna. The EPA also couldn’t calculate the worth of wild animals in the U.S. encountering less mercury in their environments.

In the rest of its benefit calculation, the EPA relies heavily on something for which there is firmer science: The health effects of super-fine particles, the kind that make the air look hazy and that penetrate deeply into the lungs. The filters power plants will have to install, under the EPA's new rules, will clean the air of these particles, too. The EPA expects its laws' reduction of fine-particle pollution to reduce emergency-room visits and lost work days from illness and save 4,200 to 11,000 lives, for an overall value of $36 billion to $89 billion. That's more than 90 percent of its overall valuation of its laws.

The EPA couldn't calculate the mercury exposures that matter most.

Another calculated benefit is the the reduction of the U.S.' emissions of greenhouse gases. The worth of that, the EPA says, is $360 million. The number includes benefits such as avoiding flood damage to buildings from global warming.

The one thing both sides do agree upon is the cost of the new regulation, which includes costs to plants, for buying and maintaining modern filters, and costs to the government, which will have more rules to enforce. That's all worth $9.6 billion.

Tellingly, the Supreme Court won't be ruling on whose numbers are correct. That would be a hard job to do. Instead, the court will consider whether the EPA should have considered cost early on in its decision to regulate mercury emissions. Had the EPA had to consider cost early on, opponents argue, the gases the agency seeks to regulate now may never have made it onto the list. The EPA says it had the right to put anything on its regulatory list, regardless of cost.

The arguments come down to some fundamental questions government agencies must grapple with: How much is human health worth, and is that a calculation we should even make?

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