Editorial: Envirnoment needs protection but at what cost?

There’s potentially good news on the environmental front out of Washington D.C., but it’s probably more than offset by a devastating announcement last week.

First, the good news. The U.S. Supreme Court ruled 6-3 that the Environmental Protection Agency, when upgrading older power plants, may consider costs before demanding use of the most advanced technology, as required by law. The ruling was a defeat for environmentalists, who challenged the Bush administration’s discretionary practice.

Hans Bader, special projects counsel for the Competitive Enterprise Institute think tank, said the ruling permits continued cost-benefit analysis as an option in upgrades such as at issue in the lawsuit brought by New York-based environmental group Riverkeeper. The group sued under the Clean Water Act’s requirement that upgrades must include “the best technology available for minimizing adverse environmental impact.”

Water drawn from U.S. waterways to cool power-plant machinery kills billions of fish and other small aquatic creatures that are crushed against intake screens or sucked into cooling systems. Newer plants with advanced technology reduce the kill rate by 98 percent.

If government required the “best technology available” in every case it would cost $3.5 billion a year, according to the EPA’s estimate. While the ruling let stand the Bush administration’s weighing of costs against environmental benefits, it is unknown how President Barack Obama’s EPA will use that same discretion.

The bad news is the EPA has also declared carbon dioxide and five other so-called greenhouse gas emissions to be harmful, under similar discretion provided by a previous high-court ruling. Finding the naturally occurring CO2 harmful gives government the authority to regulate the gas as it does truly harmful air pollutants.

CEI and other free-market advocates had written EPA Administrator Lisa Jackson, warning that such a finding would “set the stage for an economic train wreck.”

The EPA’s determination that CO2 endangers the environment by contributing to the greenhouse gas effect — a point disputed among scientists — triggers a rule-making procedure that will affect “1.2 million previously unregulated entities, office buildings, big box stores, enclosed malls, hotels, apartment buildings, even commercial kitchens,” said the letter from Marlo Lewis, CEI senior fellow, and others.

The EPA can use its CO2 finding to pressure Congress to pass cap-and-trade regulations to limit emissions, and to require businesses to buy “permits” for annually declining emissions levels. If Congress balks, as it did last year, the Obama administration could threaten to achieve the same restrictions by administrative edict.

Unlike the power-plant case, the law doesn’t give the EPA cost-benefit discretion for air quality matters. By the agency determining CO2 to be harmful, it necessarily triggers rule-making that explicitly may not take costs into account, Bader said.

Nevertheless, in both cases, the Obama administration has the power to determine how much economic pain to inflict. It can and should weigh the high economic cost of protecting tiny fish, but also should minimize the regulatory damage regarding CO2 until the scientific question is settled.