You’re a savvy political appointee. You’re bringing out a new regulation that will raise electricity rates all over the country, particularly in battleground states of Illinois, Ohio, Indiana, Florida and Michigan. What’s your PR strategy? You choose the Wednesday before Christmas, when most people aren’t paying attention.
You schedule the announcement at a place designed to tug at the heartstrings, the National Children’s Hospital in Washington, D.C. The hospital’s CEO and the national volunteer chairman of the American Lung Association deliver remarks.
You say this costly initiative is for the children, and that millions of children will be protected. You talk about how 15 years ago your son spent his first Christmas in a hospital, suffering from asthma.
Of course, you say nothing about the costs. Your state-by-state interactive map shows benefits for each state, but no costs. (These you bury in a 510-page Regulatory Impact Analysis.)
And you throw in some job creation for good measure, 46,000 new construction jobs and 8,000 utility jobs — without mentioning lost jobs from higher electricity rates.
Environmental Protection Agency Administrator Lisa Jackson is one smart politician, and that’s what she did on Wednesday with the Mercury and Air Toxic Standards for Power Plants rule.
The MATS rule would restrict power plants’ and boilers’ emissions of heavy metals, including mercury, arsenic, chromium and nickel, and acid gases, such as hydrogen chloride and hydrogen fluoride.
This would make electricity generation far more complex and expensive, especially in the eastern half of the United States. It would require the closure of many coal and oil-fired power plants, and placement of emissions control equipment on others. Forty-five percent of American electricity is produced by coal.
Jackson’s EPA estimates its new rules would cost households and businesses $10 billion a year in 2016. Benefits, calculated at $33 billion to $81 billion each year, starting from 2016, supposedly come from improvements in Americans’ health, mostly from decreases in asthma.
But these projected benefits are “guesstimates,” gains that are hard to specify given that other factors, such as obesity and lack of exercise, are in play.
These vast projected savings from asthma make no sense. America’s air has been gradually getting cleaner since 1980, as EPA’s own data show, but the number of children with asthma has risen.
According to the Centers for Disease Control, 3.6 percent of children had asthma in 1980, and almost twice the percentage, 7.5 percent, in 1995.
In 2009, using a slightly different measure, 10 percent of children had asthma. CDC acknowledges that “the causes of asthma remain unclear and the current research paints a complex picture.” Yet on Wednesday EPA forecast 130,000 fewer asthma cases from its new rule, mostly from fewer particulates.
Susan Dudley, director of the Regulatory Studies Center at George Washington University, wrote in the National Journal on Monday that EPA derives its benefits by assigning high values to reducing emissions of fine particles (not air toxics or acid gases) that will occur as a side-effect of the required controls on mercury.
However, EPA already regulates these particles through other rules. Through sleight of hand, EPA calculates almost all of the benefits for this new rule from particle reductions that fall well below the levels it has already established as safe in other proceedings.
Mercury and arsenic are well-known to the public as toxic, and in certain doses can be lethal. But the new EPA rules would push caps unnecessarily low, driving up generating costs and the price of power to industry and households.
There are five more government business days before the end of the year. Who knows what other rules will emerge before 2012?
Examiner Columnist Diana Furchtgott-Roth ([email protected]), former chief economist at the U.S. Department of Labor, is a senior fellow at the Manhattan Institute for Policy Research.
