TCS Daily


High Court's Air-Standards Finding Drains Reason From Environmental Rule-Making

By Kenneth Green - February 28, 2001 12:00 AM

A unanimous Supreme Court handed the U.S. Environmental Protection Agency (EPA) a victory this week, overturning a federal appeals court's findings of fault with the air pollution standards EPA passed in 1997.

The High Court found that EPA does not have to consider implementation costs when it sets national ambient air quality standards, but only in the actual implementation stage. The Court also ruled that EPA did not make law in setting those standards in a way that violated constitutional limits on Congress' ability to delegate authority to un-elected regulatory bodies.

Everyone favors clean air, and, indeed, air quality in most of the country has improved for 30 years, with improvements generally starting before federal regulations were put in place. But the High Court's findings are a mixture of good and bad for those who want both clean air and rational risk-management policy.

On the plus side, the justices agreed with the key point several risk-management proponents (myself included) argued in the summer of 1997. "It is unquestionably true, and Congress was unquestionably aware of it," Justice Anthony Scalia observed in his opinion for the Court, that "the economic cost of implementing a very stringent standard might produce health losses sufficient to offset the health gains achieved in cleaning the air for example, by closing down whole industries and thereby impoverishing the workers and consumers dependent upon those industries."

On the negative side, while acknowledging the validity of that argument, Scalia wrote that Congress meant to leave such considerations to the EPA administrator during implementation of the rules. Part of the rationale given by Scalia for this finding was that other laws, including the 1990 Clean Air Act revisions, required the administrator to show concern for costs, and that Congress wanted to allow for standards that might be technologically impossible to meet at a given time, to allow for "technology forcing."

But by putting the consideration of cost-effectiveness off until implementation, the Court allows the EPA to wear blinders when it issues rules with such wide-ranging impacts as to leave few resources behind to address other environmental and non-environmental risks.

Whether or not it conforms to the Clean Air Act of 1970 and its subsequent amendments in 1990, this type of fragmented approach makes no sense. Should every agency, discharging every law in its purview, be allowed to promulgate standards that threaten to consume the entirety of the nation's public health resources all by itself? Clearly not. But if every agency should not follow this course, why should EPA? And why in this one law (the Clean Air Act) and not in others, such as the Clean Water Act? Congress may well have intended this, but that doesn't make it rational.

Another avenue for mischief comes when cost-efficiency considerations await implementation, as the Court allows. Cost efficiency can get short shrift at that late stage despite the injunction of other laws that the EPA consider it. While a state can propose whatever means it prefers to meet air pollution standards, EPA models determine whether a state can claim credit for a proposed pollution-reduction measure. Furthermore, the EPA can (and often does) dictate what states can or cannot implement simply by denying them credit. This often prevents implementation of lower cost, decentralized, market-oriented programs.

An example of this is EPA's stinginess with credits for innovative vehicle emission-test programs. Numerous studies have shown that EPA's favored approach to testing vehicle emission systems misses the bulk of vehicle emissions (most of which come from a small percentage of the vehicle fleet); test mostly vehicles that are likely to be low-polluting; provide little clean-air benefit; impose high costs on states, and create significant consumer hardship. But states wanting to try other approaches are routinely denied credit in EPA compliance models. In fact, it took an act of Congress to force the Clinton-era EPA to stop giving only half credit to the emission reducing potential of programs that didn't fit their "central command" ideology.

As for the argument that Congress favored a legal structure that was "technology forcing," the ongoing fiasco over California's electric-vehicle mandate shows that such thinking embodies the "planner's fallacy." It posits that somehow government officials have "special knowledge" of what can and can't be done technologically. After10 years of "technology forcing" in California, no electric vehicle has proven the test of the market. Meanwhile, regular gasoline engines have improved so much that their lowered emissions in a few years will match in cleanliness those from the power plants required to charge a huge fleet of electric cars. Meanwhile, the cost of mandatory electric-car production is likely to jack up new car prices so much that people hold on to their old, more polluting cars longer, so more harm than good is done.

Yes, everyone favors clean air, and recent improvements in air quality are clearly a good thing -- the optimist's "glass half full." But for those who want clean air and a rational system of ranking investments for public safety and health, the Court's air quality standard decision risks keeping the glass half empty forever unless Congress now changes the law.

Green directed a three-study series examining EPA's new air quality standards in 1997. Policy Studies 224-226 can be found at http://www.rppi.org/envpub.html
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