Despite its conservative tilt, the Supreme Court has given environmentalists a rather remarkable run of success over the last decade. The justices’ 2007 ruling that the EPA could regulate greenhouse gas emissions under the Clean Air Act set the stage for much of the Obama administration’s ambitious agenda to combat climate change. And just last year, the government largely prevailed in two cases challenging the limits it had placed on industry emissions.
On Monday, that winning streak came to an end when the Supreme Court’s five Republican-appointed justices blocked the Obama administration’s regulations on the emission of mercury and other toxins from coal-fired power plants. The 5-4 decision found that the EPA had violated the Clean Air Act by not considering the cost of compliance before deciding to limit mercury pollution. The government had argued that it considered the cost throughout its process of writing the mercury rules, but not at the outset. Writing for the majority, Justice Antonin Scalia said the EPA failed to meet the law’s requirement that it regulate those pollutants only after determining, based on impact studies, that it was “appropriate and necessary” to do so. He cited the agency’s own finding that the mercury rule would carry a nearly $10 billion annual cost while generating direct benefits of just $4 billion to $6 billion a year.
Read naturally in the present context, the phrase “appropriate and necessary” requires at least some attention to cost. One would not say that it is even rational, never mind “appropriate,” to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits.
No regulation is “appropriate” if it does significantly more harm than good. There are undoubtedly settings in which the phrase “appropriate and necessary” does not encompass cost. But this is not one of them.
The sharp-tongued Scalia finally had the chance to author a majority opinion after writing a series of fiery, colorful dissents against the court’s rulings in favor of Obamacare and same-sex marriage. He compared the EPA’s logic in arguing that it did not initially need to consider the cost of regulations to a consumer who decides to “buy a Ferrari without thinking about cost, because he plans to think about cost later when deciding whether to upgrade the sound system.” Sparring with Scalia in the dissent, Justice Elena Kagan called the comparison “witty but wholly inapt”:
A better analogy might be to a car owner who decides without first checking prices that it is ‘appropriate and necessary’ to replace her worn-out brake-pads, aware from prior experience that she has ample time to comparison shop and bring that purchase within her budget.
Aside from the Ferrari metaphor, Scalia’s opinion was fairly dry and—dare we say it—bland. Even more importantly for environmental advocates, it was narrow. The ruling did not touch the EPA’s ambitious Clean Power Plan to limit carbon emissions from coal plants, and it said nothing about the substance of the mercury rules—only how they were promulgated. Finally, the court left it entirely up to the EPA to determine how it would consider cost when deciding whether to regulate. “This is clearly a loss,” said John Walke, the clean air director for the Natural Resources Defense Council. But, he told me on Monday, “it’s a narrow loss that turns on a disagreement over the meaning of the word ‘appropriate’ in context. So it’s hard to see it having broader judicial implications or ideological implications, notwithstanding the split. It’s certainly not an ideological broadside against either the EPA or environmental regulations.”
The practical impact of the ruling is also unclear. The case was remanded to a lower court, and environmental advocates said that at minimum, the EPA would have to go back and undertake additional cost studies of the mercury rule. The agency noted that because the regulation was issued three years ago, industry “investments have been made and most plants are already well on their way to making emissions reductions.” Advocates said it was unlikely that plants that had shuttered rather than comply with the rule would reopen and that some companies even found that the compliance costs came in under projections. (The deadline for compliance was this April, although some companies received an extension.) “Much of the industry has kind of moved on,” said Sean Donahue, an attorney who argued the case on behalf of the Environmental Defense Council and public health advocates before the D.C. Circuit Court of Appeals. “Whether they like this rule or not, they’ve decided they could live with it.”
The big question is what, if anything, the Supreme Court’s ruling in the mercury case portends for court challenges to the Obama administration’s more recent regulatory agenda on climate change. Mitch McConnell, the Senate majority leader who has accused the president of waging a “war on coal,” seized on the ruling to urge Republican governors to resist complying with the EPA’s climate regulations:
While much of the damage of this regulation has already been done, the ruling serves as a critical reminder to every governor contemplating the administration’s demands to impose more regressive—and likely illegal—regulations that promise even more middle-class pain. Clearly, there is no reason to subject their states to such unnecessary pain before the courts have even had a chance to weigh in, especially if the Supreme Court simply ends up tossing the regulation out as we saw today.
Environmental advocates don’t seem that worried. The difference in law between the mercury rule and the climate regulations, Walke said, was “apples and oranges.” And the narrow nature of Scalia’s ruling doesn’t offer much of a signal either way about how the Court might rule on EPA regulations going forward. Monday’s ruling may have been a defeat for environmentalists, but it wasn’t a rout.