Executive Order 13,563: Not Just Costs, Not Just Benefits, But Cumulative Costs and Benefits

Proving the old adage that you must be careful what you wish for, conservative officials in 25 states have done their best to hoist the Obama Administration on its own petard by running off to court to oppose the EPA rule that would curb toxic emissions from power plants. They argue, among other things, that the agency had not itemized the “cumulative” costs of this and all other electric-utility-oriented regulations under Executive Order 13,563 and needed at least another year to get this burdensome task done.  

Issued this January, EO 13,563 is the leading edge of the Obama Administration’s effort to persuade polluting industries that it has their best interests at heart. Like every other executive order on the books, it says on its face that it “does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States.” The proposed power-plant rule has not yet been identified by the White House as a candidate for post-election length delay, but the utility industry and its state allies are hoping a federal district court judge will overlook this technicality and force the Administration to do a cost-benefit analysis that accounts for the proposed rules costs and benefits in the context of other existing regulations. 

Under a consent decree approved in 2010 by the same judge that will hear this case, EPA is slated to produce the final rule no later than November 16, 2011. That decree settled a lawsuit in which the American Nurses Association and other organizations, alleged—correctly as it turns out—that the 1990 Clean Air Act required the agency to have dealt with this last, major source of mercury emissions many years ago. Most definitely not a product of EPA Administrator Lisa Jackson imagination, the rule was but one of many authorized by Congress in a statute that was enthusiastically supported by a Republican President George H.W. Bush. In fact, so many states were disgusted with EPA foot-dragging, that they adopted their own mercury control rules years ago, and today 56 percent of power plants already meet the standards.   The outliers are plants so old and so dirty that they should have been retired years ago. In fact, they’re known in the industry as “the old dirties.” 

The new rule would reduce mercury, acid gas emissions and other hazardous air pollutants from 1,200 coal-fired and 525 oil-fired power plants, preventing 17,000 premature deaths and 11,000 heart attacks per year. Complying with the emissions standards would cost the utilities an estimated $10.9 billion in 2016, but would provide between $59 billion and $140 billion in health benefits. 

The states bringing the lawsuit are Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wyoming, and the territory of Guam.

When the Office of Information and Regulatory Affairs (OIRA), the White House’s deregulatory quarterback, crafted EO 13,563, it undoubtedly hoped that the health, safety, and environmental agencies that labor under its thumb would spend a lot more time crunching numbers and worrying whether regulation—rule by rule and cumulatively—was  undermining the economy. Along the way, the Administration borrowed some of the anti-regulatory rhetoric of the sworn enemies of such protections, and crafted a rule that has created this opening in court for them. The challenge may or may not succeed, but while the states brought it, it’s a product of the Administration’s own pandering.