What the Supreme Court’s mercury ruling means for the EPA

JUDY WOODRUFF: Now, the court's EPA decision that we were just discussing is sending ripples of reaction through both the environmental and energy groups, as you might imagine.

Our Jeffrey Brown has more on what the ruling will mean.

JEFFREY BROWN: And we start at the White House.

After high court victories on the Affordable Care Act and same-sex marriage, today, as Marcia pointed out, President Obama suffered a Supreme Court setback on his environmental policy.

White House spokesman Josh Earnest spoke to reporters earlier today.

JOSH EARNEST, White House Press Secretary: We're still reviewing the decision that was announced by the Supreme Court earlier today.

Obviously, we are disappointed with the outcome. And for specific questions about how — what impact the outcome of this decision will have on that rule-making process, I would refer you to the EPA.

I will say, however, that based on what we have read so far, there's no reason that this court ruling should have any impact on the ability of the administration to develop and implement the clean power plan.

JEFFREY BROWN: And we pick up on the question of the ruling's impact with Lynn Goldman, dean of the George Washington University School of Public Health, and Jeff Holmstead, an attorney with the firm Bracewell & Giuliani, who defends companies and business groups in environmental cases.

And both our guests previously served as assistant administrators at the EPA.

Jeff Holmstead, let me start with you. You're on the winning side in this case. How serious a challenge do you see this to EPA regulation in this area?

JEFFREY HOLMSTEAD, Environmental Strategies Group: Well, this was by far the biggest rule that EPA had done to this point.

EPA suggested it cost about $9.6 billion a year. And it has really been the centerpiece, at least so far, of what they have done, so I do think it's a signature loss for the agency.

JEFFREY BROWN: As in its ability to do what?

JEFFREY HOLMSTEAD: Well, the issue here really is quite simple.

The question is, does EPA need to take into account the cost of its regulations before it makes these decisions? And the court, not surprisingly, said, yes, that's an important aspect of any decision like this, and you have got to consider the cost. So that will — they really did establish a principle that will affect many other regulations.

JEFFREY BROWN: Well, before we get to the larger impact, this particular case, you continue see it quite as so sweeping?

LYNN GOLDMAN, Dean, Milken Institute School of Public Health, George Washington University: I don't, actually.

I was disappointed in the ruling. I don't think it's a major setback. I think that it will force the EPA to go back and incorporate the considerations of costs that they used in the final stage, where they actually developed the standard. They didn't incorporate those cost considerations into the initial stage.

JEFFREY BROWN: Explain that for the layman, because it's a little confusing. The question of cost and benefits are out there. The EPA says it has done some of that, so what is the court saying that they didn't do?

LYNN GOLDMAN: Well, it's also a unique situation with this rule, because there were specific provisions in the Clean Air Act with regard to the regulation of mercury that required EPA to first make a finding about whether mercury and related toxics should be regulated.

And, of course, from the standpoint of public health, they said, yes, it should. And then, if so, how? And they did do a very careful examination of the costs in that second stage, but not in the first stage. And I think what the justices said is that they should have done it in the first stage.

And so why I don't think it's a setback is that they have done the work to analyze the costs and the benefits to public health. And they can now go back and incorporate that into the original findings. So, I don't see it as being sweeping particularly because of the specifics around the mercury provisions, but also because I think, look, we're at a stage where 70 percent of the industry is already complying with this rule.

JEFFREY BROWN: Yes.

Well, what about that? And also, just to be clear, you're not disputing the notion that the EPA's mandate to regulate in this area has been tampered with by this ruling, right?

JEFFREY HOLMSTEAD: Well, it really has been.

The reason why EPA didn't consider cost, they didn't take that decision lightly. The problem they had is, if they acknowledge the cost at the front end, they would have a very hard time justifying this regulation.

So it has gone back to EPA. We will see the way they deal with it, but it really does establish this principle that unless Congress has told the agency that it can't consider cost, then it is unreasonable and therefore unlawful for the agency to make these decisions without taking cost into account.

JEFFREY BROWN: Go ahead.

LYNN GOLDMAN: Which is actually, I think, not the case, because EPA's analysis did say that this rule saves 11,000 lives a year, prevents 130,000 asthma attacks a year, and, in fact, provides a range, between $37 billion and $90 billion every year in savings.

And so this — it is simply not true that the regulation isn't worth the benefits. It's just that that calculation wasn't done at the outset. It was done at the back end.

JEFFREY BROWN: What about his larger point, that there is a principle established here that will have some impact on — a wider impact on environmental law?

LYNN GOLDMAN: I don't see that. I don't see that.

I think that under, you know, successive administrations that this performance of cost and benefit analysis, EPA has always had to do that, and it's a procedural issue of where that's incorporated, and not whether or not it would result in a rule.

(CROSSTALK)

JEFFREY BROWN: Can you give us an example of where you…

JEFF HOLMSTEAD: I just disagree with that.

This is the first time the court has said very clearly — and it's true it's in the context of a specific issue, but what they said is, unless has Congress told an agency that they can't consider cost in making regulatory decisions, they have to do so.

(CROSSTALK)

JEFFREY BROWN: But can you give us an example? This summer, I think we're expecting some more regulations on — around climate change and greenhouse gases from power plants. Now, would those be in play now because of this court case in terms of what EPA can or cannot do?

JEFFREY HOLMSTEAD: I do think that this decision will have significant implications for that rule just as a practical matter.

But I think Lynn and I would both agree the legal holding is not relevant because, in that case, EPA has said it considered the cost. But here's why I think it will be important. Number one, it just shows now for the second time in a row that the Supreme Court is not just going to rubber-stamp what EPA wants to do.

And there's big questions about this green power plant rule. But the other thing is this. As Lynn said, most of these plants have already had to comply with a rule that the court now said was legally invalid, at least in terms of how EPA did it.

That means that companies have spent tens of billions of dollars and something like 100 power plants have shut down because of this rule that now the court has said is going to be illegal. And I think that will be something that they will look at when it comes to the next…

(CROSSTALK)

JEFFREY BROWN: Let me just get a brief last word. You think the EPA will just see this as a bump in the road and continue on?

LYNN GOLDMAN: Because the court didn't overturn the rule. It sent it back to the lower court.

And all EPA has to do is redo the analysis. I don't think it was unreasonable for EPA to feel, if they have to consider it at one stage, they don't have to do at two. And that's what it was all about.

JEFFREY BROWN: Lynn Goldman, Jeff Holmstead, thank you both very much.

JEFFREY HOLMSTEAD: Thank you.

LYNN GOLDMAN: Thank you.

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