Ep. 84: If It Ain't Broke, What Are We Fixing, Exactly?

The Mercury and Air Toxics Standards (MATS), finalized in 2015, were designed to lower the amount of mercury and toxic air pollution Americans are exposed to from coal- and oil-fired power plants. But last week, the Trump administration relaxed those standards, rewriting a major aspect of the rules. With the vast majority of power plants already in compliance, why roll it back now?

On this episode, we hear first from someone who helped write the original rule. Joseph Goffman is a former senior counsel at EPA under the Obama administration. He now runs the Environmental & Energy Law Program at Harvard. And next, we hear from John Walke, senior attorney at the Natural Resources Defence Council. He explains why the rollback of the Mercury and Air Toxics Standards foreshadows what's to come.

Listen to the full episode or read the transcript below:

Reid Frazier: So let's start with the basics. What is the Mercury and Air Toxics Standards Rule? 

Joseph Goffman: The MATS rule is and was issued by the EPA, originally 2011. The power plants that were affected by the rule had to put pollution reduction equipment on their smokestacks and have it essentially up and running by April of 2015. 

The rule not only went into effect on schedule, but the vast, vast majority of power plants put the equipment in that they had to put in and they turned the equipment on. It's been running successfully ever since, reducing lots of pollution, not only mercury and air toxins, but lots of other pollution as well. From the point of view of protecting what the air that people breathe, it's been very, very successful. 

Frazier: So what did the administration do here last week? They did not just roll the whole thing back, but they changed something important about it. What was that? 

Goffman: Well, the good news is that even this administration explicitly said that they didn't want to have the utilities turn the equipment off. But there is a tricky part of this particular part of the Clean Air Act as it applies to power plants. And that tricky part is what the administration changed.

Congress told the EPA that as a first step before they set the [original] emission standards, the EPA had to analyze whether or not power plants were emitting mercury and other air toxics at high levels. And after analyzing that question, they had to determine whether or not it was "appropriate and necessary" to regulate emissions from power plants [as the Clean Air Act states].

“Here we are in the middle of a pandemic when everybody's health is on the forefront of everybody's mind, and now comes along…another way that their health will be put in danger, by increases in pollution.”

Back in 2011, after the EPA had done a study of the question about how much mercury was coming out of power plants and whether it was a problem, the EPA took the step of determining that it was, "appropriate and necessary," to regulate that mercury. Then it took the next step to set the pollution reduction targets.

What this EPA did was say, ‘Hold on a second. We actually think that in our analysis, it isn't "appropriate and necessary" to regulate mercury. We think that the costs of regulating mercury outweigh the benefits. And even though at this point in time, we can't undo the standards, we are going take off the books the determination that it was “appropriate and necessary” to regulate mercury. And we're going to take it off the books specifically because we don't like the way the costs and the benefits balance out.’

This is a chapter in a much longer story that is all about the war that the Trump EPA is waging against cost-benefit.

Frazier: So the major change is they're basically arguing against using something called co-benefits for these regulations when doing a cost-benefit analysis of the regulation. Can you explain what a co-benefit is and how the EPA had been using it before? 

Goffman: One way to think about a co-benefit is to think about it in practical terms as co-reductions. When you put a piece of equipment on a power plant to scrub out of the smokestack mercury and acid gases, which are a byproduct of burning coal and oil, that same piece of equipment scrubs out an awful lot of soot. The technical term is fine particles.

So when you turn on the equipment and you run it, you get rid of the mercury, you get rid of the acid gases, and you get rid of a lot of deadliest form of pollution. Up until this point, whenever the agency adopted any kind of rule, it would look not only at the reductions that the rule was intended to achieve, but it would also look at the co-reductions.

You put a piece of equipment in that reduced one form of pollution because that's what you were intending, and it also reduced lots of other forms of pollution, then the EPA would count all of that as the total benefits of the rule.

This administration has said we don't want to do it that way. We don't care how many different kinds of pollution a particular rule achieves. We want to just count specific parts of the total pollution burden and only have to be responsible for the benefits from that smaller subset of pollutants. So that's what's going on here. 

“So you see the problem for the administration. They wanted to roll back rules…but at the same time, the calculation was that the benefits clearly outweighed the costs. What do you do with a dilemma like that?”

I want to jump to the back story. Two things basically happened more or less at the dawn of this administration. Thing number one was that the administration made clear that it wanted to deregulate as much as possible. It wanted to roll back, particularly Environmental Protection Agency regulations and rules.

“They couldn't change that arithmetic, so they changed the math.”

In fact, the President issued an executive order in March of 2017 that went through a list of rules that were on the books and told the EPA to relook at those rules. It didn't take much insight to realize that what he was telling the EPA to do was roll those rules back or at least weaken them.

Now about the same time, another part of the government, the Office of Management and Budget, did a comprehensive study of all of the regulations, including the regulations that EPA had issued in the previous 20 years, counted up the costs of those rules and counted up the benefits. The benefits of those rules outweighed the costs by millions, if not hundreds of millions of dollars.

So you see the problem for the administration. They wanted to roll back rules, they wanted to deregulate. But at the same time, the calculation was that the benefits clearly outweighed the costs. What do you do with a dilemma like that?

Well, the answer is, change the way you count the benefits and change the way you count the costs so that you are deregulation project looks like it makes sense, even though your own analysis shows that it doesn't.

They couldn't change that arithmetic, so they changed the math, if you will. They've done it three or four times already involving different rules. Last week's change was just another flavor, using just another tool to change the way costs and benefits are balanced against each other. 

Frazier: Changing the cost-benefit formula that you use for these regulations, is that simply to make the regulations look better to the public? Or is there a legal requirement to make sure that the numbers work. Why is that cost-benefit analysis so important? 

Goffman: It is to make it look better to the public. The president says he wants to undo the rules and the government also shows how valuable the rules are. You know that's a conundrum.

So in order to accomplish the first thing, you want to change the second thing so that the public doesn't see how much we're all losing in terms of the value of pollution regulation.

Sometimes comparing costs and benefits is a legal requirement. But going back to the Reagan administration, and carrying through to every administration since, the White House has required all of the government agencies to do a rigorous analysis comparing costs and benefits. 

Frazier: So if this isn't going to allow coal plants to shut off their pollution controls and they've already complied with this rule, what is the impact of this rule? Will this impact how future regulations in this and future administrations are made? 

Goffman: The thing that's really maddening is that EPA administrator Andrew Wheeler signed the rule on Thursday of last week. The rule turns on a very specific legal argument that's connected directly to one particular provision of the Clean Air Act that is close to unique within the Clean Air Act.

So at first blush, you would say, this only involves one provision of the Clean Air Act and it won't have much effect going forward. But about 24 hours later, Administrator Wheeler, said, oh, no, this rule foreshadows things we're gonna do elsewhere. What he meant by that, and I think he was pretty clear, is this foreshadows the fact that in other rules, we're going to use similar tactics to minimize the dollar value of the benefits so that you're comparing smaller benefits to larger costs. That will create momentum against more regulation. 

Frazier: Just on a personal level, what is it like to see a rule that you presumably spend a lot of time helping put together get dismantled? 

Goffman: Well, it's really kind of traumatic. What's going to make it worse is that the good news that we have today, which is that the rule that was issued on Thursday does not tell the power plants to turn their pollution control equipment off and start emitting again -- that part of the Thursdays rule is going to be challenged, I think, by certain companies and maybe certain states and maybe certain parts of the coal industry.

That's going to be playing out in the coming months and maybe years and frankly create a lot of stress on the power plant operators. They've already committed to buying and running this equipment. It's going to put a lot of stress on states whose job it is to make sure that air quality is maintained and improved and who've been counting on the reductions that this rule creates. 

Personally, I got into this business because I really think that people's lives are affected by how much pollution they're exposed to. The reason for doing all this is to use the law to protect people's health. Here we are in the middle of a pandemic when everybody's health is on the forefront of everybody's mind. Now comes along yet a new risk that there'll be another way that their health will be put in danger, and that is by increases in pollution.

We're entering a nerve-wracking period. There's another answer, of course, Reid which is when you work in this area as long as I have and particularly when you've had the good luck of working in the Environmental Protection Agency, which employs amazing people, you really learn to respect the integrity of the methods that the government uses to do analysis. 

To the extent that the quarry here that's being attacked by this rule is trying to sabotage that methodology and sabotage the integrity of these methods, that's really painful to watch.

All of our fates are dependent on how good a job or how bad a job the government does in analyzing science, analyzing technical issues and applying that analysis. 

Next we talk with someone about what happens next with this rule. John Walke is a senior attorney at the Natural Resources Defense Council. 

Frazier: John, I guess my big question is what happens next with the MATS rule? What is the upshot if all these coal plants are already in compliance, and if they still have to keep their air pollution controls on, what is going to happen with this rule now. 

Walke: Let me walk through that. This rule was challenged by some coal companies and other utility companies that not only thought we should be ignoring all benefits from reducing air pollution, but thought that these lifesaving standards that avoid up to 11,000 deaths every year should be overturned in court. That lawsuit is still pending. 

So we know that there are bad actors out there, coal companies that want to see these standards overturned, even though everyone across the country is complying with them.

On the other hand, the utility companies themselves support the standards. Their perspective is, ‘look, we've spent the money on the controls. We're meeting the standard. We can continue to meet the standards. They're protecting our communities and our customers. We don't want these standards undermined or jeopardized because that could threaten our ability to recover costs for the pollution controls that we're running to protect our communities.’

So you've got an interesting dynamic there. We'll find out whether there will be lawsuits resumed or initiated anew to seek to overturn the standards themselves. So you're going to have a whole range of people and parties rushing into court, some seeking to overturn the Trump EPA attack on the standards, some seeking to exploit the Trump EPA attack on the standards, in order to try to kill the standards themselves, even though they're being universally complied with across the country. 

Frazier:  So lawsuits in both directions then. And does this ruling on co-benefits throw into question other regulations? I mean, every EPA regulation comes with cost-benefit analysis in terms of, you're preventing 30,000 deaths but it's going to cost the industry $300 million dollars or something. And they have to sort of justify it, at least in writing. Do you think that this will have some carryover into other types of regulations? 

Walke: That's a great question Reid and you've really gone straight to the bull's eye. I would say that this Trump EPA attack is just as much about, if not more about, attacks on a wide range of clean air and climate change safeguards adopted by EPA not just now, but well into the future to try to constrain actions by a future president.

“What the Trump EPA has done with this attack on the mercury standards is to unleash a very clear agenda to ignore the benefits of reducing all forms of air pollution.”

Here's why. When you control smog pollution or toxic air pollution or the dangerous pollution that drives climate change like methane and carbon dioxide, you also helpfully reduce fine soot particles that contribute to heart attacks, strokes and premature deaths.

Every EPA since the beginning, including the Trump EPA, prior to this week, has recognized the logic and the appropriateness and the need to recognize all benefits from cutting all pollution because Americans enjoy those benefits. 

What the Trump EPA has done with this attack on the mercury standards is to unleash a very clear agenda to ignore the benefits of reducing all forms of air pollution. If you ignore the benefits, then it seems on paper to become much more costly for industry to cut those other forms of pollution like smog and methane and climate-changing carbon dioxide.

So this is really part of a broader, more insidious agenda to prevent EPA from adopting effective climate change regulations, effective smog regulations and effective regulations for toxic air pollution like the Mercury and Air Toxic Standards that launched this broader ideological attack this week.

Frazier: So what happens if we have a change in the White House. Is this making it harder for a Biden administration to bring up a new regulation in the future? 

Walke: Yes, that's exactly the Trump EPA agenda. We know this because just last week, the Trump EPA sent over to the Trump White House a broad rulemaking to apply to the entire Clean Air Act, not just the power plants, and how it regulates industries and vehicles and all forms of air pollution in America.

“A future administration under a different president could certainly move to reverse that rule…but that takes years.”

What this rulemaking will do is to adopt radically different methods for accounting for the benefits and costs of regulating air pollution and climate change pollution. We know from inside sources at EPA that it intends to adopt the exact same approach used in the attack on the mercury standards, namely ignoring the benefits of cutting all forms of pollution from smokestacks and tailpipes using the Clean Air Act.

Now, a future administration under a different president could certainly move to reverse that rule, just like it could move to reverse the mercury rule. But that takes years, and that's exactly why this cynical ploy is being carried out in what amounts to the latter half of 2020 when they'll finalize this broad, sweeping rule.

They are acting simply to constrain possible new president next year and presidents. beyond that with this mechanism that dishonestly accounts for how much air pollution is actually being reduced in the real world by clean air standards. 

Frazier: I'm thinking a little bit about the Clean Power Plan or any future climate change policy. I'm sure that any kind of Democratic administration that puts forward some sort of climate change proposal would want to calculate in the co-benefits of, say, reducing particle pollution from fossil fuels if we stop burning gas and stop burning coal and gasoline and things like that. It'll be a big carbon benefit, but there will also be less air pollution. 

Walke: That's exactly what will happen. But here's the dirty little secret and the irony. The Trump EPA and this former coal lobbyist, Andrew Wheeler, who runs EPA, has done exactly that with their rollbacks and attacks on the Clean Air Act in an effort to claim those rollbacks have benefits that outweigh the costs. The Trump EPA itself has credited and recognized the benefits of cutting all forms of air pollution, including deadly soot particles.

The Trump EPA did that with its rollback of the Clean Power Plan, with its substitute called the American Clean Energy (ACE Rul). They've done that with methane rules for oil and gas. They've done that with air attacks on the clean car standards.

In several of those examples, the only possible way that the Trump EPA could muster any claim that the rollback had benefits greater than the cost was by considering the benefits of cutting toxic soot pollution. Had the Trump EPA done, in those rules, what they did in the mercury standard for power plants, namely ignoring co-benefits, then the Trump EPA would have been forced to admit that the rollbacks had cost greater than benefits.

So there's just rank hypocrisy and some real disingenuous behavior here. They're willing to consider co-benefits when they think it aids adoption of rollbacks, but they're not willing to consider co-benefits when it aids the protection of safeguards for the American people. 

Frazier: So obviously, this is going to be heading to court, the question of whether what the EPA did here was was legal essentially and following the guidance set by Congress. We have a 5-4 Supreme Court in favor of the conservatives. What are your predictions in terms of what they would say about whether or not what the EPA did here was was OK? 

Walke: I actually think Reid, that any judges or justices, whether you call them liberal or conservative, will have severe problems with a Trump agency that decides that it can simply ignore benefits that occur under its rules. The reason is that that is just an irrational and arbitrary approach to considering benefits and costs. 

“If the EPA is going to ignore co-benefits, that means the agency should be able to ignore indirect costs. That's going to be harmful for industries in the future.”

In fact, it is at odds with Trump EPA guidance that remains in place to this day. The Trump EPA has adopted and ratified the same guidance that requires agencies to consider so-called ancillary benefits and costs, which is the same thing as co-benefits when it also considers direct benefits and costs. That's because you want to have an honest accounting of what the consequences of rules are going to be 

So this is a situation where what's good for the goose is good for the gander. If an agency like the EPA is going to ignore co-benefits, that means the agency should be able to ignore indirect costs. That's going to be harmful for industries in the future. It won't be tough for conservative judges or justices to figure that out very quickly.

I think that they are going to find that an agency that acts in this manner, whether it's a Republican or Democratic agency, is just flouting sensible, logical and longstanding benefit-cost practices, and is engaging in behavior that the law considers irrational and arbitrary. I don't think it will survive a judicial challenge.