On Election Day the Supreme Court will hear arguments in one of its biggest cases in years. It’s arcane and complex. But you might want to know something about it anyway, because it could affect your respiratory system, your risk of getting skin cancer or cataracts, the view from your office, the jobs of industrial workers, and the prices of cars, electric power, and lots of other stuff.
The case also happens to be a pretty good example of how dumb some federal regulators and judges can be. It involves the Environmental Protection Agency’s 1997 decision to require the 50 state governments to cut ground-level ozone (smog) levels to 0.08 parts per million from the existing maximum of 0.09 ppm. The purpose was to protect hundreds of thousands of children and others from transient respiratory problems such as coughing and painful breathing, to avert tens of thousands of hospital visits by asthmatics and others, and to guard against the unproven possibility that inhaling ozone might hasten the deaths of some elderly people. But in making this decision, the EPA and its administrator, Carol Browner, ignored evidence that cutting ozone levels might well do more harm-including harm to public health-than good.
Most remarkably, the agency refused to take account of an uncontradicted Energy Department analysis suggesting that because ozone has the beneficial effect of blocking harmful ultraviolet-B radiation, the new rule could cause 25 to 50 new melanoma deaths, 2,000 to 11,000 new cases of nonmelanoma skin cancer, and 28,000 new cases of cataracts each year. The EPA also ignored projections that the economic costs to society of complying with the new ozone standard would far exceed the health benefits. Its own staff estimated long-term compliance costs at $9.6 billion per year, for the sake of health benefits worth $1.5 billion to $8.5 billion per year. President Clinton’s Council of Economic Advisors at one point projected health benefits of no more than $1 billion and costs in the range of $11.6 billion to $60 billion. (In the same proceeding, the EPA also mandated a reduction in the levels of airborne "particulate matter," or soot. It estimated the annual health benefits at $20 billion to $110 billion and annual costs at $37 billion.)
These numbers reflect the law of diminishing returns: The very success of federal environmental programs in cutting pollution over the past 30 years, to the great benefit of public health, has by now made it ever-more expensive to produce ever-smaller health benefits.
Is the EPA’s position in court that its latest, costliest-ever ozone and particulate standards nonetheless do more good than harm? Nope. Rather, it maintains that the projected melanoma deaths and other costs and risks are irrelevant to its decisions setting air quality standards. Why irrelevant? Well, in the Clean Air Act amendments of 1970, Congress told the EPA to set air quality standards "requisite to protect public health" with "an adequate margin of safety." The EPA construes this language as requiring that no matter how great the projected costs and risks, it must set pollutant levels as low as necessary to avert even the tiniest of public health problems. In fairness to Browner, this has been the agency’s view since 1970 and the view of the U.S. Court of Appeals for the District of Columbia Circuit, which oversees the EPA, since 1980. (The EPA has finally abandoned its bizarre view that only health problems affecting breathing counted, which was its rationale in 1997 for ignoring skin cancers and cataracts.)
But why would Congress want the EPA to set aside common sense and run the nation’s most costly regulatory program with blinders on? And why has the agency itself always urged the appeals court to bar it from considering costs and risks? And why did the D.C. Circuit Court do just that in its 1980 decision Lead Industries Association vs. EPA?
The EPA’s explanation is that Congress quite clearly mandated the blinders-on approach out of a valid concern that inherently speculative estimates of costs and risks might err on the high side, making it hard to pressure states and regulated industries to develop more cost-effective pollution control technologies. When air quality standards prove unattainable in practice without intolerable costs, the argument goes, the EPA can extend compliance deadlines and Congress can step in.
The statute can indeed be read this way. But the hypothetically possible results would include absurdities such as requiring that industry (and ultimately consumers) spend another $10 billion (or $100 billion, or $1 trillion) if necessary to push the ozone level low enough to protect an estimated nationwide total of 300 (or 30, or 10) high school athletes from temporary, smog-induced respiratory pain.
A more plausible explanation is that the 1970 statute tiptoed around the matter of costs without specifying whether the EPA should consider them because Congress prefers that voters see its handiwork as all benefit and no cost. The EPA is happy to read the statute as barring cost-benefit balancing because that makes it easier to gratify its environmentalist constituency without having to justify the costs to the public or the courts. As for the judges in Lead Industries, maybe they thought (as their opinion says) that Congress had left them no choice. Maybe they thought the EPA and its environmentalist allies were the good guys. Maybe they were unaware that societal spending on pollution abatement would divert resources from such other uses as making better, cheaper products and funding cancer research. And maybe they figured that the agency would surely (if covertly) find ways to avoid imposing obviously unwarranted costs.
In fact, the EPA has done just that. One sign of such covert cost-benefit balancing is that while scientists say that even the tiniest levels of man-made smog and some other pollutants may cause at least a few minor health problems, the agency has never cut the levels to zero.
The EPA faced a very different D.C. Circuit panel last year, when Reagan-appointed Judges Stephen F. Williams and Douglas H. Ginsburg and Clinton-appointed Judge David S. Tatel heard industry challenges to the new standards for ozone and particulates. The Reagan judges exuded disdain both for the new standards and for their own court’s old precedent. They said that Lead Industries would theoretically require "deindustrialization" and even "the total prohibition of fire" if necessary to eliminate all possibly unhealthy man-made air pollutants. But Lead Industries was too established for two lower-court judges to overrule it. So they came up with an ingeniously unconventional ruling: Over Judge Tatel’s dissent, they struck down the Clean Air Act itself, at the same time hinting that in the expected appeal the Supreme Court could save the statute by getting rid of Lead Industries.
Judges Williams and Ginsburg did this by resurrecting the doctrine that the Constitution bars Congress from delegating legislative powers to anyone else, including the President and agencies such as the EPA. This "nondelegation doctrine" has been considerably eroded by the exigencies of regulating an increasingly complex national economy. But Judges Williams and Ginsburg held that the doctrine still has enough bite to strike down the Clean Air Act-as construed in Lead Industries-as a delegation of legislative power so sweeping and standardless as to allow the EPA to impose enormous costs on the entire national economy without having to justify them to the public or the courts.
This was seen by some liberals as a radical attack on the foundations of federal regulatory programs going back to the New Deal, and was too bold even for some conservative Reagan judges. On the other hand, it was applauded by some mainstream liberal scholars. Professor Laurence Tribe of Harvard Law School, for example, argues in an amicus brief (for General Electric) that "the need for a vigorous nondelegation doctrine has only been heightened by the power accorded to administrative agencies," because "the political processes that check congressional action" will otherwise be undermined.
The Williams-Ginsburg strategy may have some success even if the Supreme Court reverses their decision. The Justices have agreed to hear not only the Clinton Administration’s appeal of the nondelegation ruling but also industry arguments for junking Lead Industries and reinterpreting the Clean Air Act as mandating some kind of cost-benefit balancing. Among those so arguing in amicus briefs is a bipartisan group of 42 economists, including such prominent Democrats as Laura D’Andrea Tyson, Alice M. Rivlin, Robert E. Litan, Paul R. Krugman, and Robert M. Solow.
The oral arguments may provide clues where the Justices are headed. What they should do is dodge the nondelegation issue but uphold industry’s argument that the EPA must take costs into account. And that might be better for the public’s health (not to mention its economic well-being) than the ruling urged by the EPA and most environmental groups.