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Michigan v. Envtl. Prot. Agency

Justia Summary

The Clean Air Act (CAA) directs the Environmental Protection Agency (EPA) to regulate emissions of hazardous air pollutants from stationary sources, such as refineries and factories, 42 U.S.C. 7412; it may regulate power plants under this program only if it concludes that “regulation is appropriate and necessary” after studying hazards to public health. EPA found power-plant regulation “appropriate” because power plant emissions pose risks to public health and the environment and because controls capable of reducing these emissions were available. It found regulation “necessary” because other CAA requirements did not eliminate those risks. EPA estimated that the cost of power plant regulation would be $9.6 billion a year, but that quantifiable benefits from the reduction in hazardous-air-pollutant emissions would be $4-$6 million a year. The D. C. Circuit upheld EPA’s refusal to consider costs. The Supreme Court reversed and remanded. EPA interpreted section 7412(n)(1)(A) unreasonably when it deemed cost irrelevant to the decision to regulate power plants. “’Appropriate and necessary’ is a capacious phrase.” It is not rational, nor “appropriate,” to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits. That other CAA provisions expressly mention cost indicates that section 7412(n)(1)(A)’s broad reference to appropriateness encompasses multiple relevant factors, including cost. The possibility of considering cost at a later stage, when deciding how much to regulate power plants, does not establish its irrelevance at the earlier stage. Although the CAA makes cost irrelevant to the initial decision to regulate sources other than power plants, the point of having a separate provision for power plants was to treat power plants differently. EPA must decide how to account for cost.

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