Life and Death Dispute Over New Air Regulation
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The Fiscal Times
November 30, 2011

Amid mounting Republican complaints about “job killing” federal regulations, the White House is likely to approve a highly controversial  clean air regulation next  month that will force the electricity industry to either clean up or replace its oldest and dirtiest coal-fired generation plants.

Though the country is mired in slow-growth and a near jobless economic recovery, the Obama administration’s Environmental Protection Agency plans to order the clean-up  for one compelling  and hard-to-ignore reason: the health benefits for the American public far exceed the costs to either the industry or electricity consumers. The  coal plant “maximum achievable control technology” or MACT rule would provide an estimated $10 in health benefits for every $1 of industry costs, according to the EPA.

Unlike a proposed ozone abatement rule that the White House postponed earlier this year that targeted a broad swath of industries for much smaller health benefits, the MACT rule only applies to dirty coal-fired plants.  The government is under court order to come up with the rule by December 16  after a coalition of environmental groups won a suit against  President George W. Bush’s administration, which had  stonewalled implementation for eight years.

Most of the benefits, estimated at $100 billion a year, will come in the form of a sharp reduction in the 13,000 to 17,000 premature deaths that occur annually  when elderly Americans are exposed to  particulate  matter belched from uncontrolled coal plant smokestacks. An estimated 74 gigawatts of capacity or 23 percent of the nation’s coal-fired electricity comes from plants over 40 years old that are not equipped with modern pollution scrubbers. Virtually all of those plants are located  east of the Mississippi River.
 
“The studies provide compelling evidence that short-term exposure to heightened levels of air pollution over a few days increases the risk of both respiratory and cardiovascular events, including death,” said Brigham Young University economics professor C. Arden Pope, who considered himself a skeptic when he began his research over a decade ago. “Reducing particulate pollution provides you with almost immediate benefits that are substantial.”

But that hasn’t stopped the coal-dependent sectors of the electricity industry and coal producers from waging a fierce struggle in Congress and the courts for more than two decades to stop implementation of the rule under the  Clean Air Act and its 1990 amendments.  The 1990 amendments mandated that industry adopt the best available technology for scrubbing smokestack emissions without regard to cost because of the demonstrated health benefits, which in those days were far less certain.

Now, having lost in court and with the health effects better documented, the industries directly hit by the rule have taken to airwaves and deployed an army of lobbyists to push their cause at the White House, on Capitol Hill and in state capitals, where 24 state attorneys general have voiced opposition.

 The American Coalition for Clean Coal Electricity, whose membership roster includes American Electric Power, Southern Company, Peabody Coal, Caterpillar, and GE Energy, claims in its ads that the MACT rule will “destroy over 180,000 jobs per year,” force consumers to pay over $120 billion in higher electricity costs and $50 billion in higher natural gas prices over the next decade.

“The average U.S. family loses $270 per year in disposable income,” an analysis by a consulting firm hired by the industry claimed. That translates into about a 6 percent to 7 percent increase in utility costs over the next decade.

It’s an expense households should gladly embrace, environmentalists and health advocates say, since the health benefits will reduce other household expenses and penalties by a far greater amount. In addition to premature deaths, power plant pollution triggers an estimated 20,000 heart attacks a year and hundreds of thousands of asthma attacks, which translates into higher health care costs and higher health insurance premiums for the general public.

The clean-up would also sharply reduce mercury and other toxic chemical emission. Those dangerous emissions are associated with as many as 2,675 excess cases a year of mental retardation, according to the EPA, which costs the health care and education systems as much as $3.3 billion a year.  The Sierra Club and other environmental groups  have focused their public relations strategy on that particular cost, running billboard ads throughout the nation’s capital showing a pregnant woman wondering how much mercury is in her developing fetus.

spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the Chicago Tribune and other publications. He is the author of the 2004 book, The $800 Million Pill: The Truth Behind the Cost of New Drugs.