Each week, we’re compiling the most relevant news stories from diverse sources online, connecting the latest environmental and energy economics research to global current events, real-time public discourse, and policy decisions. Here are some questions we’re asking and addressing with our research chops this week:
What happens when the economic research underlying EPA’s push to revise restrictions on mercury pollution gets an impartial assessment?
Even as many agencies shift course due to the coronavirus pandemic, the Trump administration is pushing to substantially revise many regulations. EPA Administrator Andrew Wheeler indicated early last month that updated Mercury and Air Toxics Standards (MATS)—which in their original form impose limits on power plant emissions—“should be out any day now,” but it wasn’t until this week that the administration formally rescinded the legal justification underlying MATS. While not an official rollback, the move exposes MATS to future legal challenges. Weakening MATS has been a priority for the administration, ever since EPA issued a controversial benefit-cost analysis that rebutted previous estimates of the benefits and costs and deemed the restrictions too costly to justify. In the wake of that benefit-cost analysis and EPA’s decision to dissolve an advisory board that assessed EPA’s regulations, a group of environmental economists formed their own external committee and planned to weigh in on the push to weaken MATS.
This week, members of that committee—the External Environmental Economics Advisory Committee (E-EEAC)—have released a new journal article in Science, which finds that EPA’s revised benefit-cost analysis is “seriously flawed.” Coauthored by RFF Senior Fellow Karen Palmer and RFF University Fellow Joseph E. Aldy and their colleagues, the paper finds that EPA’s analysis both neglects to consider co-benefits and overlooks the increasing body of research that suggests mercury pollution can seriously harm human health. On this week’s new episode of Resources Radio, coauthors Mary Evans and Matthew Kotchen elaborate on why the methodological flaws underlying EPA’s analysis have broader implications for rulemaking, especially as the Trump administration continues revising regulations. “I fear that some of these types of moves that have been coming out of the Trump administration recently are basically going to undermine the credibility of [EPA],” Kotchen says. For more, listen to the podcast.
Related research and commentary:
Who is most impacted by PM2.5 pollution, and what more can be done to reduce their exposure?
Even after a widely publicized study found that long-term exposure to fine particulate matter (PM2.5) is associated with a higher coronavirus mortality rate, EPA opted to leave the agency’s soot standards in place this week, rather than strengthen the regulations. Oil and coal companies contend that tighter regulations impacting smokestack emissions would have posed unreasonable costs, especially at a time when reduced demand is threatening energy companies. Still, scientists at EPA in a draft report last year encouraged stricter standards, given evidence that high concentrations of PM2.5 are associated with thousands of deaths every year. EPA’s inaction on soot standards comes after its decision to ease pollution enforcement efforts during the pandemic, because the agency contends that social distancing requirements are making it harder for businesses to meet agency standards and control pollution.
RFF experts have closely studied how PM2.5 pollution impacts public health. And according to RFF Senior Fellow Alan Krupnick, leaving the existing rules on soot pollution in place is ill advised. Krupnick coauthored a 2018 working paper that used satellite data to measure PM2.5 concentrations across the country, finding serious gaps in the data from EPA’s land-based monitors. He concluded that millions more Americans are exposed to levels of PM2.5 pollution that exceed legal concentrations than previous reports indicated. “According to land-based monitors, many misclassified areas were found to have PM2.5 levels just below the required standard. A slightly tightened standard would bring these areas into noncompliance, inducing them to cut PM2.5,” Krupnick now argues. For more on why measuring particulate matter pollution presents so many challenges, read the paper and listen to the accompanying Resources Radio podcast episode.
Related research and commentary:
- Working paper: Using Satellite Data to Fill the Gaps in the US Air Pollution Monitoring Network
- Podcast: Sensing Pollution with Satellites, with RFF's Alan Krupnick and Daniel Sullivan
- Blog: Twice as Many Americans Live in Counties Not Meeting Fine Particulate Air Quality Standards as Previously Thought
What new challenges does FERC face as it implements the minimum offer price rule that impacts PJM’s capacity market?
In an effort to limit the strain of the coronavirus pandemic on the energy industry, the Federal Energy Regulatory Commission (FERC) has granted extensions on regulatory filings and started reviewing requests for relief from regulated entities. But the agency also announced that it will not revisit its December order, which requires grid operator PJM Interconnection to expand its minimum offer price rule (MOPR) to include nearly all state-subsidized resources. Last month, PJM submitted a compliance filing to outline how the company would follow FERC’s order. Assuaging concerns that FERC’s order threatens renewables, PJM’s filing lowers default floor prices for wind and solar and allows specific renewable energy projects to advocate for even lower floor prices. But the MOPR order may still present challenges that the states cannot (or will not) meet: New Jersey has floated the possibility of an exit from PJM’s capacity market based on fears that the MOPR order imperils the state’s clean energy goals.
Objections from states over the MOPR order are hardly the only problem FERC faces, contends RFF University Fellow Todd Aagaard in a new blog post. Drawing on a journal article he has coauthored with Penn State’s Andrew Kleit, as well as recent Resources blog posts that assess the implications of recent FERC policies, Aagaard argues that FERC’s MOPR order affecting PJM’s capacity market suffers from at least three legal defects. According to Aagaard, FERC’s order arbitrarily distinguishes subsidies from other government policies that impact electricity markets, imposes unjustifiable costs on consumers, and ignores states’ legal authority to subsidize electricity generation. For more on how “incremental expansion of the MOPR has led FERC down a path that over time has strayed far from the agency’s original approach,” read the blog post.
Related research and commentary: