The Clean Power Plan’s Counterfeit Benefits

My op-ed in today’s Wall Street Journal.

You can read the Wall Street Journal version here.

My slightly more detailed version (with links) is below.

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Clean Power Plan: Real Costs, Fake Benefits
By Steve Milloy

The Trump Environmental Protection Agency’s proposed repeal of the Obama administration’s Clean Power Plan represents an amazing and long overdue breakthrough in the history of environmental regulation. Not only has no Republican administration ever before mustered the courage to rollback a major EPA regulation, but the Trump administration has done so by directly challenging the rule’s purported health benefits. That’s unheard of.

Although the Clean Power Plan was pitched as being about reducing emissions of greenhouse gases from coal-fired power plants, the benefits of averted climate change is not how the Obama EPA justified the rule on an economic basis. There certainly were no discernible climate change benefits to be claimed as House Science Committee Chairman Lamar Smith (R-Tex.) forced Obama EPA administrator Gina McCarthy to acknowledge in testimony. (Video below).

Instead, the EPA justified the net benefit of the rule on the basis of collateral reductions (so-called “co-benefits” in regulatory parlance) in fine particulate matter (soot or “PM2.5”) emissions from power plants. So while the compliance costs of the Clean Power Plan could be as high as $33 billion per year, the Obama EPA was able to overcome this immense number and coal industry complaints by proferring an even larger off-setting one. The Obama EPA claimed that the rule’s benefits from reducing PM2.5 amounted to as much as $55 billion per year.

What are the supposed $55 billion in economic benefits? That sum is intended to represent the monetized value of thousands of premature deaths allegedly prevented every year by the Clean Power Plan via the co-benefit of reduced PM2.5 emissions. Given that EPA values premature deaths avoided at around $9 million per life “saved”, thousands of lives “saved” times millions of dollars per life “saved” equals tens of billions of dollars in purported annual benefits.

EPA staff invented this calculus in 1996 to justify its first effort to regulate PM2.5. As I wrote on this page at the time (link goes to WSJ, copy of 1997 op-ed below this one), there was no science to support the notion that PM2.5 in outdoor air killed anyone. But EPA regulated anyway, stiff-arming not only the objections and demands rom the Republican controlled Congress for the scientific data underlying its claims, but also stiff-arming the objections of then-Vice President Al Gore who thought the PM2.5 rule too costly.

As it had historically always been difficult for EPA to tighten air quality standards because of costs, the EPA used its imaginary notion that PM2.5-kills as a way to game the cost-benefit analysis. As the Clean Power Plan amply demonstrates, no industry cost-benefit analysis could possibly trump EPA’s thousands-times-millions-equals-billions ruse – that is until, well, Trump.

The Trump EPA has now largely jettisoned the notion that PM2.5 kills. And it has done so in a clever way that not only justifies the repeal of the Clean Power Plan but simultaneously hoists the Obama EPA on its own petard.

The Trump EPA has reduced the Obama EPA-claimed benefits of PM2.5 emissions reductions by as much as a whopping $29 billion per year, which then nets out very favorably against the rule’s anticipated costs of as much as $33 billion per year. Here’s the clever part.

The Clean Air Act requires that air quality standards for pollutants such as PM2.5 be set at a safe level which includes an ample margin of safety for supposedly especially vulnerable populations. The Obama EPA reduced the national outdoor air standard for PM2.5 in 2012 from a level of 15 millionths of a gram per cubic meter of air to 12 — thereby making 12 standard the de facto safe level.

Despite the existence of the 12 standard, the EPA has long claimed that there is no safe level of exposure to PM2.5 and that any inhalation of PM2.5 can cause death within hours of inhalation. But EPA could never lower the PM2.5 standard to zero because such a standard could not be attained even if the economy was entirely shut down.

Neverthless, EPA’s benefit analysis for the Clean Power Plan assumes that PM2.5 does kills people below the 12 standard. But the devilishly clever Trump EPA has simply accepted the Obama-issued PM2.5 standard of 12 at its legal meaning and, so, there are no lives saved by reducing PM2.5 levels below that level. Thus vanished $29 billion in fake Clean Power Plan benefits.

There is a large, robust body of scientific literature that supports the Trump EPA decision — everything from large epidemiologic studies to clinical research to historical air quality episode data to other real-life experiences with PM2.5 to just plain old common sense. Standing against the Trump decision is nothing but dubious, pre-Trump EPA-funded epidemiology, the key data for which pre-Trump EPAs have kept secret from more than 20 years thereby preventing independent analyses. The Obama EPA even defied Congressional subpoena to keep its PM2.5 epidemiologic data hidden from view.

New York Attorney General Keith Schneiderman and green activist groups have already announced they will sue over the repeal. Good luck. When the Supreme Court voted to stay the rule in February 2016, the Court implicitly decided the coal industry and state plaintiffs would prevail on the legal merits alone. That the Clean Power Plan has no economic or climate benefits will just underscore its final demise.

EPA chief Scott Pruitt has hailed the repeal of the Clean Power Plan as the end of the Obama “war on coal.” It’s more like the beginning of the end. The end will be reached when scientific reality about PM2.5 is applied to all the Obama war-on-coal rules.

Steve Milloy served on the Trump EPA transition team and is the author of “Scare Pollution: Why and How to Fix the EPA” (Bench Press 2016).

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The EPA’s Clean Air-ogance
By Steven J. Milloy and Michael Gough
Januatu 7, 1997, Wall Street Journal

The Environmental Protection Agency has proposed a dramatic tightening of air-quality standards in an attempt to reduce deaths and illness from air pollution. The regulations already have ignited public controversy. Even Sen. John Chafee (R., R.I.), a leading environmentalist voice in GOP ranks, has expressed skepticism about whether the new standards are necessary. Sen. Chafee is right to be skeptical.

Out for public comment until next month and scheduled to be finalized by June, the proposed standards would cost the American people more than $10 billion annually. Such a staggering sum is not in itself a reason to reject these changes, if making them is essential to public well-being. But a close inspection of the EPA proposal shows that it lacks a sound basis in science.

The proposed standards cover two kinds of air pollution: ozone (smog) and particulate matter (soot). When the EPA first considered revising these standards, it was, properly, considering the two pollutants separately. But even the EPA recognized that its ozone proposal is not likely to produce sufficient public health benefits to justify its costs. So last May, the agency combined the two proposals, allowing it to use estimates of the tremendous benefits from the proposed particulate standard to cover the costs of the ozone standard.

The EPA estimates that the particulate standard will save 20,000 lives per year. Given that the EPA values a human life at $5 million, the agency estimates that the particulate standard will produce more than $100 billion of annual benefits, far outstripping the proposed rule’s costs. But how certain is the EPA of the benefits of the particulate proposal? Not very, if you consider the principal EPA study supporting the particulate proposal.

In this epidemiological survey, funded by the EPA and published in 1995, researchers concluded that higher death rates exist among populations living in geographic areas with higher levels of particulate air pollution. Specifically, based on a 1982-89 study of some 550,000 adults in 151 metropolitan areas, the researchers claim to have identified a 17% increase in mortality among inhabitants of the most polluted areas in the country.

But the study suffers from a basic epidemiological problem known as the “ecologic fallacy.” This simply means that although the most polluted communities may indeed have a 17% higher death rate than the least polluted area, this coincidence does not by itself demonstrate a cause-and-effect relationship between air-particulate pollution and death rates.

First, although the study included more than 550,000 people, the researchers did not measure how much air pollution even one study subject was exposed to. Instead, they guessed how much pollution these individuals might have encountered.

Second, study subjects undoubtedly differ in many behavioral, occupational, environmental and genetic factors that were inadequately considered by the epidemiologists. Any one of these factors, or a combination thereof, could explain the difference in death rates. For example, the researchers did not look at variances in the subjects’ diet, income, health history, exercise habits or migration characteristics. The researchers did adjust for some factors (education level, occupational exposure and weather), but more precise adjustment could easily negate the purported 17% increase in risk.

A further problem should make us skeptical of the epidemiological study’s findings: It turns out that nobody has demonstrated how airborne particulates could cause higher death rates. Of course, epidemiology isn’t designed to provide information about such biological mechanisms, but the EPA hasn’t come up with any other credible research to fill the gap.

Taken in this context, the reported increase in risk is only an artifact of statistics, called a statistical association. It is not scientific proof that air pollution causes premature death. Among epidemiologists, statistical associations that purport to represent increases in risk of less than 100% are considered to be “weak associations.” As the National Cancer Institute points out: “In epidemiologic research, [risks of less than 100%] are considered small and usually difficult to interpret. Such increases may be due to chance, statistical bias or effects of confounding factors that are sometimes not evident.” And Science magazine noted last year that “many epidemiologists concede that their studies are so plagued with biases, uncertainties and methodological weaknesses that they may be inherently incapable of accurately determining . . . weak associations.”

In pushing through the new air-quality standards, the EPA is clearly going against the bulk of scientific opinion. The agency has opted to ignore the advice of its own Clean Air Scientific Advisory Committee, a group of experts from academia and industry whose advice EPA is required to seek under the Clean Air Act. Most members of the advisory committee advised against lowering the ozone standard, concluding that it would provide only marginal public health benefits. Only four of the 21 members supported EPA’s proposed standard for particulate matter.

The method used by the EPA to support stricter air pollution standards is classic junk science–not a new problem at the agency. In the EPA’s 1992 audit of how the agency uses science, a blue-ribbon panel of independent scientists found that the EPA “lacks adequate safeguards to prevent” science from being adjusted to fit policy.

There is a solution. The responsible scientific community must set standards for the use of epidemiological evidence. Had such a code been established earlier by groups such as the National Academy of Sciences, many unfounded but widely publicized cancer scares, including those surrounding cellular telephone usage, abortion and aspartame might well have been prevented. Unless the scientific community polices itself, the task of controlling junk science-fueled regulation will fall on Congress and its newfound authority to review regulations–an authority Congress is already preparing to exercise if EPA’s proposed air standards are finalized.

Whether it’s scientists or congressmen, somebody has to rein in the EPA. We already have enough legitimate social and public-health problems to worry about without EPA and its surrogates fabricating more out of thin–and presumably safe–air.

Mr. Milloy is publisher of the Junk Science Home Page on the World Wide Web. Mr. Gough is director of science and risk studies at the Cato Institute.

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