06.20.2011 0

Assessing the EPA’s Moral Case for New Power Plant Emissions Rules

By Victor Morawski – The Environmental Protection Agency (EPA) has recently proposed two controversial new rules that set a national standard for emissions from coal-fired power plants.

Since these rules are part of the Clean Air Act, it must follow that Act’s Congressional mandate to conduct a cost-benefit analysis of the societal impact of any such proposed standard. This analysis shall “consider all of the economic, public health and environmental benefits” as well as “the effects…on employment, productivity… [and] economic growth” caused by compliance with the standard.

It is mandated by law not just for economic but for moral reasons, following the utilitarian assumption that a policy is morally justified if on balance it produces more good than bad results for society as a whole. A long-accepted way of gauging these results is with a cost-benefit analysis which justifies a policy morally if, on the whole, its economic benefits outweigh its costs.

Ideally, one should be conducted from a disinterested perspective where the person or agency functions as an impartial observer, fairly weighing costs and benefits against one another from what ethicists call “the moral point of view.”

All too often, though, these analyses can be unfairly skewed by omitting or deliberately misinterpreting relevant data.

According to the EPA, its new emissions standard will require the installation of new pollution control equipment on 44 percent of existing coal-fired power plants along with its ongoing maintenance.

Astonishingly, the EPA estimates the total costs to society of what it calls its “toxics rule” to be equivalent to the yearly costs to the power plants affected of installing and maintaining this equipment, about $10.9 billion: “we estimate the social costs of the proposal to be…identical to the compliance costs.” Are these truly the only societal costs of these new rules?

What about the effects of the new rules on employment? Here again it considers the direct employment impacts of the proposed rule to be only those associated with installing and maintaining the new pollution control equipment and sees only beneficial effects: “EPA estimates this proposed rule will provide employment … by supporting 31,000 short-term construction jobs [for those building and installing the equipment] and 9,000 long-term utility jobs [for those maintaining it].”

Stated differently, the rule would increase employment by 31,000 job years in 2015.

Of the indirect employment impacts of the rule it sees virtually none that are statistically significant and concludes that, “pollution abatement expenditures do not necessarily cause economically significant employment changes.”

But a very different picture emerges from an alternative analysis done by NERA Economic Consulting for the American Coalition for Clean Coal Electricity. It concludes that because of increased coal unit retirements and decreased demand for coal from the electricity sector, “Net employment in the U.S. would be reduced by more than 1.4 million job years” between now and 2020.

The relatively small number of jobs gained through pollution equipment installation and maintenance pales by comparison with this figure yet the EPA does not even consider these impacts.

Another significant discrepancy exists between the EPA’s projected effects of its rules on residential electric costs and NERA findings.

The EPA claims, “these proposed standards will result in relatively small changes in the average retail price of electricity… resulting in a consumer electricity price increase of … $3-4 per month.”

By contrast, NERA concludes that “Average U.S. retail electricity prices in 2016 would increase by about 12 perecent, with regional increases as much as about 24%” — far more than a few dollars a month!

The EPA makes various claims for the health benefits of its rules: “Each year the standards will prevent serious illnesses and health problems: up to 17,000 premature deaths, 11,000 heart attacks, 120,000 asthma attacks,….” And, “for every dollar spent to reduce this pollution, Americans get $5-13 in health benefits.”

A serious scientific challenge to these claims has been mounted recently by Willie Soon and Paul Driessen who conclude that emissions from coal-fired power plants account for only one half percent of the mercury in the air we breathe. So even if many of the above health problems are caused to some extent by mercury in the air, EPA rules address so little of it that it is highly doubtful the health benefits it cites will follow from their implementation.

Thus, its moral case seems significantly wanting, ignoring important costs and over exaggerating benefits.

Victor Morawski, professor at Coppin State University, is a Liberty Features Syndicated writer.

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