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Trump’s Mercury Regulation Decision Shows Why The “Rule Of Law” (Or Lack Of) Is An Emerging Risk

What’s happening? The Trump Administration has withdrawn the legal justification for an Obama-era rule that required coal-fired power plants to reduce their mercury emissions, arguing any benefits to public health from the rule are outweighed by the costs of compliance. 

What does this matter? The above example, together with a number of other recent developments, shows – as our Chairman, Brian Posner, argued earlier this year – businesses need to consider the rule of law as a potential risk factor in the US.
 
The justification for the move centres around the cost-benefit analysis of tackling mercury emissions. Mercury pollution control measures cost US industry $9.6bn a year, and the Obama Administration offset this against the health and economic benefits of reducing not just mercury, but other air pollutants that would also be limited by the mercury pollution controls. It said these co-benefits would amount to $80bn saved in health care costs over five years. 

The Environmental Protection Agency’s current administrator, Andrew Wheeler, said this was dishonest accounting, and the current administration’s dismissal of the co-benefits stacks the economic argument in their favour.

The move leaves Mercury and Air Toxic Standards in place but could raise the prospect of lawsuits from companies that oppose them, while also preventing the implementation of similar regulations in the future. 

It also must do nothing for the policy confidence of utilities that have invested billions in equipment to limit mercury pollution, and it may well lay the path for public liabilities down the line. It follows other heavily criticised moves from the Trump administration to reverse fuel-efficient vehicle laws and reject stricter standards on soot.

More broadly, mercury is linked to brain damage, can be dangerous to pregnant women and can cause developmental problems in infants and children. Previous Trump Administration coal plant rule relaxations could result in an extra 1,400 premature deaths annually by 2030. Just because these impacts are not on the balance sheet, doesn’t mean they’re not there. 

Further thought from Curation – While the above may make sense looking back to Trump’s 2016 pledge to revive the US’ struggling coal industry, the idea then he might at some point support the US oil industry by paying it to keep its fuel in the ground would have seemed laughable. But, according to reports, that’s currently what’s being contemplated – to help oil companies deal with the current supply glut and price fallout.

It goes to show what strange times we live in when the US government is looking to pay oil companies to do what environmentalists have been arguing for years – keep it in the ground.

Nick Finegold is Founder & CEO of Curation Corp, an emerging and peripheral risks monitoring service.

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