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The Bush Administration’s regulatory approach to toxic mercury emissions from coal-fired power plants was struck down by a federal court that concluded the government flouted health law in a manner reminiscent of Alice in Wonderland. The National Academies’ National Research Council has found that some 60,000 newborns a year are at risk for neurological problems such as impaired motor function due to mercury—the largest source of which is coal-fired power plants. The Food and Drug Administration urges pregnant women to limit fish intake due to widespread contamination with mercury that made its way into the food chain. In its waning days, the Clinton administration listed mercury as a toxic substance subject to strict regulation as a health threat, but the Environmental Protection Agency (EPA), under President Bush, proposed a rule to reclassify mercury from coal-fired plants under a different section of the Clean Air Act (CAA). The EPA’s rule would have set an overall limit on mercury, while giving coal plants flexibility to meet the goal or purchase “emissions rights” from other plants—known as a “cap-and-trade” program.

The EPA said it would have cut the mercury being released in the air by 70 percent by 2018 — an improvement, but less strenuous than the 90 percent reduction by 2008 that was hoped for under the Clinton administration determination. In issuing the new rule and reclassifying coal plant mercury, the EPA used language lifted — in some cases verbatim — from utility industry law and lobby firm Latham & Watkins, as well as West Associates, a research and advocacy group. It was subsequently revealed that the EPA’s own air policy administrator was unaware of the private firms’ involvement, and that insertion of the language had actually been pushed by the White House Office of Management and Budget and the Department of Energy. Critics, including the EPA’s own Children’s Health Protection Advisory Committee, said the plan could help create “hot spots” around power plants that would disproportionately hurt communities living in the shadow of smokestacks, because mercury emissions do not disperse evenly. Allowing dirtier power plants to purchase additional pollution credits would add to that burden. EPA’s own inspector general found that the agency’s approach “was compromised.” Ultimately, New Jersey led a group of states that challenged the mercury rules, and in February 2008, a federal appeals court delivered a unanimous ruling throwing out EPA’s reclassification of mercury from one section of the CAA to another. The court said EPA’s explanation “deploys the logic of the Queen of Hearts, substituting EPA’s desires for the plain text [of the CAA].” But EPA has argued that the Clinton administration’s original finding on mercury was “erroneous,” based on anticipated environmental effects rather than on health effects. The EPA says it took into consideration the health effects, the control technologies and the potential impacts on the electricity system in coming up with its cap-and trade approach, which it said would “achieve substantial, cost-effective reductions in mercury emissions from power plants.”

The Bush Administration on October 17, 2008 asked the Supreme Court to overturn the appeals court’s ruling, calling it an “erroneous decision” which “deprives EPA of authority — expressly granted by Congress — to pursue alternative regulatory measures in combating air pollution.” The Utility Air Regulatory Group (UARG), a power company coalition, also filed its own petition with the Court in September 2008. The UARG argues that the Washington, D.C., Circuit, which struck down the reclassification, ignored Supreme Court precedent in the case. The Supreme Court has not yet decided whether to take the case; in the meantime, no federal program to limit coal plant mercury is in place.

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