Is the Environmental Protection Agency Reasonable?

Research Fellow and Assistant Director, Hudson Institute Political Studies
(Skyhobo/Getty Images)
(Skyhobo/Getty Images)

This may seem like a matter of opinion rather than of Constitutional law, something for politicians rather than for judges. But in the next couple of weeks the Supreme Court will offer its legally binding opinion on the matter when it rules on Michigan v. EPA Their decision will not only have important ramifications for the future of the EPA, but it will have implications about the future position of all administrative agencies within the American Constitutional regime.

The precise question that the Court has set for itself in Michigan v. EPA is “[w]hether the EPA unreasonably refused to consider costs in determining whether it is appropriate to regulate hazardous air pollutants emitted by electric utilities.” Thirteen states, along with several industry groups, assert that it is the height of unreasonableness. For, they argue, incurring costs of ~$9.6 billion per year in order to purchase marginal health benefits cannot be sensible. Ignoring these costs assumes that physical health is not tied to economic well-being, and that the price of power has no effect in the lives of American citizens. The EPA disagrees. The agency contends that these regulations will produce benefits of $37--$90 billion per year, not $5--$7 million as the opposition asserts. But more importantly the EPA believes that they need not consider cost at all. For submitting a health and safety regulation, even a costly one, to cost-benefit analysis is itself unreasonable.

The Court’s ruling is not yet clear. In oral arguments the Chief Justice seemed to share the skepticism of the conservative wing, while the liberal wing looked on the agency with a friendly eye. Justice Kennedy remained inscrutable This uncertainty is not fully in line with precedent, and it highlights the problems inherent in transferring power from a law-making body to a bureaucratic agency.

In the past the Supreme Court would have sided with the EPA. In fact, in very similar cases it did. The 1984 case Chevron v. National Resources Defense Council which set the precedent of ‘administrative deference’ dealt with another set of EPA regulations. Ruling in the agency’s favor, the Court asserted that if the statute that an agency has been charged to administer “is silent or ambiguous with respect to the specific issue,” then deference ought to be given to the agency’s own interpretation. Today the question is not whether Chevron is good law, but, as Cass Sunstein wrote in his article Chevron Step-Zero, whether it is “a revolutionary decision, establishing an across-the-board rule, or…a mere synthesis of preexisting law, inviting a case-by-case inquiry into congressional instructions on the deference question.” The apparent divide in Michigan is evidence that the Court is now favoring a case by case approach.

The Michigan case hinges around whether it is reasonable for the EPA to ignore costs when determining “appropriate” emission standards. The 1990 amendments to the Clean Air Act state, that power plants ought to be regulated if “the Administrator finds such regulation is appropriate and necessary” after due consideration. There is no precise mention of cost. The agency has argued that regulating dangerous partial emissions is reasonable and “appropriate” irrespective of cost. If Chevron were applied the Court would have to defer to the administrator. It seems, however, that almost half the Court is loath to do so.

It may be tempting to chalk this change up to mere partisanship. After all Kennedy is often the Supreme Court tie-breaker, and the split is along ideological lines. But this is unsatisfying. Chevron is usually not a partisan issue. In fact Scalia is often the greatest defender of its across-the-board applicability. But whether the conservative-wing has come to this conclusion for partisan reasons or not, they seem to believe that the EPA administrator is not, in fact, the best person to interpret the EPA’s statutory obligations.

Reasonableness is, in many ways, a relative term. What is reasonable for the EPA depends upon what the agency is meant to accomplish. If the EPA’s mission is to do everything possible to reduce pollution then these regulations are reasonable regardless of their economic cost. But what may seem reasonable for the EPA is not necessary what seems reasonable for the country as a whole, or to the members of the Supreme Court whose duty it is to consider the American constitutional order in its entirety. Bureaucracies left to themselves inevitably challenge the purpose of the Constitution: to promote the general welfare. In contrast they promote an endless chain of regulations.