The Belle River Power Plant in St. Clair County, Michigan.

The Belle River Power Plant in St. Clair County, Michigan. Alamy


Fuzzy Math: The Strategy Behind the Trump EPA’s Deregulation Push

Polluters have long exaggerated the cost of new regulations and downplayed their benefits. Now, the Trump administration is turning that approach into policy as it seeks to slash regulations governing power plant emissions and weaken other environmental laws.

When Tom Jorling was a Senate aide helping to draft the Clean Air Act in 1970, he often listened to executives from the nation’s biggest car companies warn that the law’s pollution-cutting requirements would put them out of business.

But during a break from one such meeting, an auto engineer told him the bosses were lying: Detroit had the expertise to make its cars much cleaner. “We can do whatever you want us to do,” Jorling recalls the technician saying. “But the executive leadership kept up with their mantra that it’s so expensive, and it’s going to threaten their viability.”

Exaggerating the costs of new regulations and understating their benefits has long been a favorite strategy in the polluters’ playbook. Now, experts say, the Trump administration wants to turn that approach into Environmental Protection Agency policy. It is pushing to rewrite the cost-benefit calculation that underpins an Obama-era rule on emissions of mercury, arsenic, and other hazardous metals from coal-fired power plants. The EPA wants to use a new, much narrower estimate of the 2011 rule’s health benefits to withdraw the legal designation that the regulation is “appropriate and necessary.”

Mathematical manipulation is becoming an important tool in regulatory rollback at the EPA.

Such mathematical manipulation is becoming an important tool for advancing the aggressive regulatory rollback the agency has pursued under EPA Administrator Andrew Wheeler — a former coal industry lobbyist — and his predecessor at the EPA’s helm, Scott Pruitt. As it seeks to unwind long-standing regulations, the administration has been discarding widely accepted methodologies for calculating the health benefits of cleaner air, and replacing them with new approaches that yield much lower estimates of the likely gains.

Those smaller numbers make the rules harder to justify, and leave them vulnerable to withdrawal or legal challenge from industry. Similar efforts may jeopardize not only the mercury rule, but other air quality and climate-protecting regulations. A parallel methodological change could shrink — at least on paper — the health benefits of the Clean Power Plan, a central element of the Obama administration’s effort to combat climate change and now a prime target of Trump and Wheeler’s deregulatory push.

“There’s a whole industry of consultants and lawyers whose job it is to make prospective new pollution control requirements as horrible-looking as possible,” said David Doniger, a Natural Resources Defense Council attorney who has been working on air quality since the 1970s. Under President Trump, he said, “now they have their hands on the steering wheel” at the EPA.

Before joining the EPA, Wheeler was a lobbyist for the Murray Energy Corporation, a coal company whose chief executive, Robert E. Murray, listed rollback of the mercury rule on a “wish list” he gave the administration shortly after Trump took office. Murray, a longtime Trump ally, donated $300,000 to the president’s inauguration.

EPA Administrator Andrew Wheeler at a hearing of the Senate Environment and Public Works Committee.

EPA Administrator Andrew Wheeler at a hearing of the Senate Environment and Public Works Committee. Win McNamee/Getty Images

The EPA is not — for now, anyway — trying to rescind the mercury rule. Most power plants have already complied with it, and their emissions of mercury, a potent neurotoxin that is particularly damaging to the brains and nervous systems of children and developing fetuses, have fallen more than 80 percent since 2011, an analysis of official data found.

But the accounting change could make the regulation, known as the Mercury and Air Toxics Standards, vulnerable to challenge. And it may have much wider repercussions. If its new, narrower approach to benefit tallying becomes entrenched, that could make it harder for future administrations to impose new regulations, and easier for opponents to unravel existing ones.

At issue are what are known as co-benefits, the gains in areas beyond a rule’s immediate focus. In this case, they include the improved health that comes from reductions in the tiny particulates and other pollutants that mercury-scrubbing equipment also removes from power plant emissions.

When the Obama administration issued the rule, it initially estimated the benefits at just $6 million annually. Mercury’s effects — lost IQ points, neurological deficits, and impaired motor skills, particularly in children — are hard to quantify in dollar terms, so the gains seemed small compared to the cost to industry, which the EPA predicted would be as high as $9.6 billion a year.

The new approach “is a way for industry to cook the books,” says a former congressman.

But a revised estimate said the particulate and nitrogen oxide reductions that accompanied mercury removal would prevent as many as 11,000 premature deaths, 4,700 heart attacks, and 130,000 asthma attacks annually, with health and productivity benefits up to $80 billion a year — far greater than the estimated price tag.

The Trump administration wants to put the co-benefits out of bounds. That would make the rules’ costs appear far greater than the gains. After a single public hearing, the EPA is reviewing public comments and considering whether to implement the plan.

Source: EPA

The new approach “is a way for industry to cook the books,” said former U.S. Congressman Henry Waxman, a California Democrat who was a key player in the passage of the 1990 Clean Air Act Amendments, under which the mercury rule is authorized. “If they’re successful in changing these equations, it would be a big victory for polluters because it opens the door for getting rid of many regulations.”

Climate-focused rules like those aimed at reducing greenhouse gas emissions from vehicles and longer-standing air quality measures could both be in jeopardy, he predicted. “That’s really what they’re after,” Waxman said in a phone interview. “This would be a very big tool for them in the future.”

The administration’s strategy, he said, was the same as the one he encountered over decades of doing political battle with polluting industries, including automobile and chemical manufacturers, power companies, and mining interests. Whenever new requirements were discussed, “invariably, we heard testimony that painted a scary, dark picture of what would happen,” Waxman said. “They hype the costs, they try to reduce the benefits.“

In reality, the cost of air quality rules most often has been far less than opponents initially predicted, said Doniger of the NRDC. That’s because industries intentionally overstate anticipated expenses, and when they do “they haven’t yet put their smart engineers to work” on finding effective solutions, he said. “If you stop the exaggeration, and you put the engineers to work, the two things result almost always in cost reductions.”

President George H.W. Bush signing the Clean Air Act Amendments in 1990.

President George H.W. Bush signing the Clean Air Act Amendments in 1990. EPA

Indeed, the mercury rule turned out to be less expensive than the Obama administration had estimated. Electric utilities have mostly opposed the plan to weaken the mercury standards because they have already made the investments needed to comply, but the coal mining industry supports weakening or rescinding the Obama-era regulation. At the EPA’s sole hearing on its proposed change, in March, Murray Energy’s assistant general counsel Cody Nett criticized “the fuzzy math and baseless hand-waving” he said characterized the Obama administration’s numbers.

While there are real questions about how best to calculate co-benefits, discounting them altogether “is in violation of basic economic tenets,” said Matthew Kotchen, an economics professor at the Yale School of Forestry and Environmental Studies who was deputy assistant secretary of environment and energy at the U.S. Department of the Treasury under President Obama. More broadly, though, Kotchen said the Trump administration’s proposed methodological changes are not always without merit. While some of its approaches were baseless, he said, others stem from real debates among experts.

“Usually there’s something out there that they’re building their case around, there’s some uncertainty” about the best way to quantify a rule’s benefits, Kotchen said. The real problem with the current EPA’s approach, in his view, is that “the assumptions that are being made are always on one side of the continuum.” Taken together, they are “definitely building an intellectual, economic, analytic case for pursuing a deregulatory agenda.”

Other administrations have used cost-benefit estimates to their advantage too, Kotchen said, adding that some see Obama-era calculations as having been designed to justify regulations the administration sought. “This goes on all the time,” he said. “But I’m very confident in saying the extent, and the 180-degree shift, of the Trump administration, is at a level we’ve never seen before.” What’s more, he added, the changes are being made without review or open discussion, in part because the EPA has eliminated many of the scientific panels that advised previous administrations on such issues.

Since passage of the Clean Air Act, researchers’ understanding of the vast economic benefits of cleaning up has become clearer.

Cost-benefit analyses did not play a major role in the Clean Air Act’s early years, but became more important later, in part as a response to the demands of regulated industries that their burdens be more carefully considered. But as the science of pollution’s profound effects on health has advanced — it is strongly linked to increased risk of premature death and a host of ailments, including heart attacks, strokes, dementia, and premature birth — researchers’ understanding of the vast economic benefits of cleaning up has become clearer, too.

The political challenge has always been that those gains are dispersed among millions of people who generally do not realize they have reaped them, while the costs fall on companies who are keenly aware of them. But rules on air pollution have delivered dozens of times more in public health gains than they’ve cost, the evidence shows. Two decades after it became law, the 1970 Clean Air Act was saving 200,000 American lives a year, and had delivered $22 trillion in benefits, more than 42 times the cost, according to an EPA report to Congress. A 2011 follow-up report put benefits from the 1990 amendments at 30 times the price of implementation.

“The cost-benefit exercise, instead of undercutting the case for cleaning up the air, reinforces the case,” Doniger said. That, in his view, is why opponents of regulation have been left with a strategy that amounts to “If you can’t beat it, let’s warp how it’s done.”