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CEI Releases New Study, "All Pain and No Gain: The Illusory Benefits of the EPA's Utility MACT"

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CEI Releases New Study, "All Pain and No Gain: The Illusory Benefits of the EPA's Utility MACT"

Study Intended to Inform Upcoming Senate Vote to Block Expensive New Rule

Washington, D.C., June 12, 2012 – Today, the Competitive Enterprise Institute published a new study, “All Pain and No Gain: The Illusory Benefits of the EPA’s Utility MACT.”

CEI scholars Marlo Lewis, William Yeatman, and David Bier authored the report in order to inform the upcoming Senate vote on S. J. Res. 37, a Congressional Review Act resolution of disapproval that would effectively block implementation of the Utility MACT. This is a recently promulgated regulation that establishes first-ever maximum achievable control technology (MACT) standards for mercury and other hazardous air pollutant (HAP) emissions from coal- and oil-fired power plants.

“EPA estimates that utilities will have to spend $9.6 billion annually in 2016 to comply with the Utility MACT—and that the Rule will deliver $0.5 million to $6 million in health benefits in the same year,” says Senior Fellow Marlo Lewis. “In other words, the estimated cost of the HAP reductions that are the Rule’s statutory purpose swamp benefits by 1,600 to one or even 19,200 to one.”

“Even these numbers exaggerate the Utility MACT’s value,” Lewis continues, “because EPA’s benefit estimate for mercury reductions rests on a chain of questionable assumptions. For example, EPA estimates that the rule will avert the loss of 0.00209 IQ points per child in a supposed population of 240,000 subsistence fishing households. This is not verifiable even in principle, because IQ cannot be accurately measured out to five decimal places.”

CEI Analyst William Yeatman adds, “The Utility MACT is one of the most expensive rules ever, and its regulatory justification is to protect a supposed population of subsistence fisherwomen, who eat 225 pounds of self- or family-caught fish from the 90th percentile most polluted inland freshwater bodies, during their pregnancies. Notably, EPA has never identified a single member of this putative population; rather, these women are modeled to exist.”

In addition to $10 billion per year in direct costs, Yeatman notes that the Utility MACT also would effectively ban the construction of new coal-fired power plants, by establishing mercury emissions limits that are well below detectable levels.

According to CEI Analyst David Bier, EPA’s claim that the Utility MACT would create jobs is disingenuous. “EPA’s economic model simply assumes that no matter how high the costs go, the regulation will always create jobs,” Bier states. “Using this formula, EPA can impose infinite costs on any industry and always claim that it will create jobs. Even if a rule costs trillions of dollars, EPA could still claim job growth.”

>> Read the full report: “All Pain and No Gain: The Illusory Benefits of the EPA’s Utility MACT

>> View the slideshow: “The Case against EPA’s Utility MACT