Deep Flaws in a Mercury Regulatory Analysis

The U.S. Environmental Protection Agency (EPA) has proposed to roll back the legal basis of its Mercury and Air Toxics Standards (MATS), in part on the basis of a benefit-cost analysis (BCA) that is seriously flawed in three ways (1, 2). The analysis disregards economically important but indirect public health benefits, or “co-benefits,” in a manner inconsistent with economic fundamentals. It fails to account for recent science that identifies important sources of direct health benefits from the reduction of mercury emissions. And it ignores transformative changes in the structure and operations of the electricity sector over the past decade. These analytical shortcomings run counter to long-standing guidance for economic analysis from the U.S. Office of Management and Budget (OMB) and from the EPA itself. If finalized, the new rule will undermine continued implementation of MATS and set a concerning precedent for use of similarly inappropriate analyses in the evaluation of other regulations.