February 13, 2017

Ending Clean Air Act Abuse Will Spur Economic Growth

By Todd F. Gaziano Chief of Legal Policy and Strategic Research, and Director, Center for the Separation of Powers

Of all the job-killing and growth-inhibiting regulations issued by the last administration, those purportedly authorized by the Clean Air Act probably had the highest costs and the smallest benefits to human health or the environment.

In June of 2015, the Supreme Court struck down one power plant emissions rule for not taking its enormous costs into account, which the EPA admitted it did not do. With regulatory costs that were about 2,000 times the estimated benefits, the court held that it was not “even rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs (the EPA’s own estimate was $9.6 billion) in return for a few dollars in health or environmental benefits.”

The court’s decision in Michigan, et al. v. EPA affirmed a common-sense principle that the EPA too often ignores: It must consider both the benefits and costs of regulations and only issue those in which the benefits exceed the costs they impose. Any other approach is economically and environmentally unsustainable, and it almost always violates federal law.

Writing for the court, Justice Scalia stressed that regulatory agencies must engage in “reasoned” decision-making, regardless of the underlying statute, and that the EPA’s actions in ignoring massive costs under the particular provision fell far short of that mark.

Unfortunately, the EPA didn’t learn anything from the embarrassing Supreme Court rebuke, returning to its Clean Air Act bag of tricks to impose other mandates in which the costs far outweighed illusory benefits.

The EPA’s so-called Clean Power Plan (CPP) is not only illegal, but it would make America less competitive by artificially driving up electric power costs in every part of the nation in furtherance of infinitesimal global-warming reductions. China and India have no incentive to follow suit, except in rhetoric, since this unilateral injury to our economy is not part of an enforceable international agreement.

The EPA also continued to advance, with the National Highway Traffic Safety Administration, unreasonable greenhouse gas emission standards for new motor vehicles and other fuel efficiency requirements that result in cross subsidies that are both economically harmful and cause more people to buy lighter cars that result in predictable deaths.

And that’s not all! The EPA has issued thousands of other rules in tens of thousands of pages of dense text that are at least 43 times longer than the Bible.

Although some of candidate Trump’s campaign promises were opaque, he was crystal clear that he would “end the war on coal” and stop the Clean Power Plan.

Trump’s clearest statements on the CPP were in his September speech to the Economic Club of New York, where he said it would cost at least $7.2 billion a year. He promised to end it, issue a moratorium on similar rules, and to “eliminate all needless and job-killing (regulations) now on the books.”

Trump has since nominated Oklahoma Attorney General Scott Pruitt to head the EPA. Pruitt has been a leader in challenging the worst EPA regulations in the federal courts. Though he predictably was labeled a climate change denier, a careful review of Pruitt’s record shows that he never challenged climate science, only the illegal regulations that the EPA issued to implement its agenda. There are various ways that the administration can eliminate the worst rules.

First, the administration should not only halt future job-killing rules in the pipeline, which President Trump did on Jan. 23, he should institute a moratorium on enforcement of almost all Clean Air Act rules issued in the past several years while new appointees review which should undergo the process or repeal of modification.

With regard to the CPP, the Justice Department should stop defending it in court and, instead, confess error and seek to settle the litigation with a judgment that strikes down the rule.

With Congress’ help, the administration can also easily kill the most unwarranted and costly regulations issued in the last few months, including the EPA’s early “Midterm Evaluation” of its 2022-2025 greenhouse gas emissions standards.

Pursuant to the Congressional Review Act (CRA), a simple majority of each house may expeditiously disapprove such midnight regulations, even if they are labeled as guidance documents. For several months after they are introduced, CRA resolutions are not subject to filibuster in the Senate, and if the president signs them it would automatically prohibit any future, “substantially similar” rule without congressional authorization.

The administration will have to prepare for the inevitable mischaracterizations that any change in policy or priorities, no matter how small or sensible, will make the sky fall and air become toxic. In the most popular American version of the Chicken Little story, the hysterical chick is eaten.

We hope instead that the amusing chick grows up and lives a more prosperous and rational existence.

Published by Investor’s Business Daily

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