Federal Court Strikes Down “Cap and Trade” System for Mercury

In February 2008, a federal court took a significant step in protecting public health.  It struck down a U.S. Environmental Protection Agency regulation that delayed reductions in air emissions of mercury from coal-fired power plants until at least 2018. The court ruled that a “cap and trade” system could not be used for a hazardous air pollutant such as mercury. (Read the court's opinion.)

The EPA, and states including Montana that have adopted weaker rules, must now rewrite their regulations to comply with the more stringent requirements of the Clean Air Act. In addition, states must re-analyze recently issued air pollution permits, such as the one Montana issued for the Highwood Generating Station, to determine whether the permits meet the requirements of federal law.

Coal-fired power plants are the leading human-caused source of mercury pollution in the air today. Each year Montana’s coal-burning plants emit approximately 1,000 pounds of mercury—more than 90% of the state’s mercury air emissions.

In 2005, after years of delay, EPA unveiled a plan to regulate mercury from coal-fired plants. But the EPA ignored the Clean Air Act requirement to control these harmful emissions to the maximum degree achievable.  Instead EPA sided with polluting industries and said that mercury from coal plants was not a hazardous air pollutant, and therefore could be controlled through a “cap and trade” system.  Under such a system, EPA would set a nationwide cap on mercury emissions from coal plants. Companies would be given emission “credits” and could buy and sell those credits on the open market. While emissions would decrease nationwide, emissions at any one plant could actually increase. This could lead to mercury “hot spots” around the country.

Fourteen states, numerous public health groups, Indian tribes, and environmental groups sued. They argued that EPA did not have the authority to “delist” mercury as a hazardous air pollutant and therefore could not authorize a cap-and-trade system for its control. The federal court agreed. The court ruled that EPA “deploy[ed] the logic of the Queen of Hearts, substituting EPA’s desires for the plain text of” the law.

Even though EPA lost, polluting industries still won.  More than seven years after it decided that hazardous air pollutants from coal plants needed regulation, EPA still has not issued any valid regulations. Time is money in the world of business, and by dragging its feet EPA has saved companies hundreds of millions of dollars. And those savings come at the expense of public health.

There is still much good news in this court decision. The Highwood Generating Station, for example, must now comply with the law as it stood before EPA adopted the illegal cap and trade scheme in 2005. That means that DEQ must require, and the developer of Highwood use, the technology that captures the maximum possible amount of mercury.

Earthjustice has already sent a letter to DEQ on behalf of MEIC and Citizens for Clean Energy saying that the Highwood air pollution permit was issued in error because DEQ relied upon a weaker standard to regulate mercury than the more stringent standard for hazardous air pollutants. Although the letter was sent on February 27th, DEQ has still not responded.

IN THE NEWS

Appeals Court Rejects EPA Mercury Cap-and-Trade Rule (WASHINGTON, DC, February 8, 2008, Environment News Service)

Court Rejects Bush Policy on Mercury Emissions (National Public Radio, with audio and related links)