EPA Must Consider Economic Impact of Regulations

The U.S. Supreme Court ruled June 29 that costs associated with the EPA's new regulations on power plant emissions were too exorbitant to justify in the context of the nominal public benefit the regulations created.

The ruling was a victory for small businesses that would have been otherwise hit with substantially higher energy costs, said the National Federation of Independent Business (NFIB).

“When agencies come up with these costly and fickle regulations, they need to consider who will inevitably pay the bill,” said Karen Harned, Executive Director of the NFIB Small Business Legal Center. “The EPA does not have the authority to implement hugely expensive new rules without performing the mandatory economic analyses.”

NFIB filed an amicus brief supporting the state of Michigan in its case against the EPA. At issue was whether the agency unreasonably refused to consider the full economic impact of its new emissions regulations.

Under the Clean Air Act, the EPA has the authority to regulate greenhouse gas emissions released from power plants if it finds the regulation to be “appropriate and necessary” after conducting a cost-benefit analysis. Michigan and NFIB argued that the agency did not properly consider all of the costs that the rule would trigger.

“This has been a pattern with the EPA, which waved aside its obligation to consider costs in its new water regulations as well,” Harned said. “But the laws are very clear and, as a constitutional matter, there must be some restraints on the executive branch of government.”

The clean air rule would have been a disaster for small businesses. Energy costs are already a priority concern, and the regulation would have resulted in sky-high energy costs and a reduction in reliable energy.

The EPA said it is reviewing the decision and will decide any next steps—including re-doing the regulation—once that process is complete. S