Oil and coal fired power plants are the country’s largest emitters of mercury, a harmful pollutant that can significantly impair neurological development in fetuses, infants, and children. The Clean Air Act Amendments of 1990 require the Environmental Protection Agency to regulate emissions of hazardous air pollutants, including mercury, from these power plants–but only if such regulation is “appropriate and necessary.” In a process that spanned over two decades, EPA determined that regulating power plants’ emissions of hazardous air pollutants was indeed “appropriate and necessary” given the public health harms they cause, and it accordingly established emission standards (known as the Mercury and Air Toxics Standards). Before finalizing those standards, the agency conducted a formal cost-benefit analysis of the regulation, finding that its benefits, which included 11,000 fewer premature deaths annually, could exceed its costs by as much as $80 billion per year.

On June 29, 2015, the Supreme Court held in Michigan v. EPA that EPA unlawfully delayed consideration of the costs of the Mercury and Air Toxics Standards. According to the five-justice, conservative majority, the phrase “appropriate and necessary” required EPA to consider costs at the initial phase of the regulatory process–when it was deciding whether to regulate hazardous power plant emissions–and not later on, once it had already decided such regulation was warranted. In writing for the majority, Justice Scalia found the agency strayed far beyond the bounds of reasonableness when it ignored costs at the outset. The four-justice dissent accused the majority of “micromanaging.” Justice Kagan, writing for the dissent, found EPA acted reasonably when declining to consider costs “at the opening bell of the regulatory process,” given that the agency took costs into account at multiple other stages when establishing its emission standards. According to Kagan, refusing to analyze costs at a single stage of the regulatory process was well within EPA’s authority.

By all accounts, Michigan v. EPA will have a limited effect on the emission of mercury or hazardous air pollutants. Because nearly 70 percent of coal fired power plants have already come into compliance with the Mercury and Air Toxics Standards (or shut down because it was too expensive to comply), most of the regulation’s benefits have been reaped. And the decision did not take those plants that have yet to come into compliance off the hook. The court declined to strike down the regulation; rather, the regulation was sent back to the D.C. Circuit Court of Appeals for review. The Appeals Court must now decide whether to keep the emission standards in effect while EPA reconsiders the costs.

The decision’s minor impact on mercury, however, has not stopped many from forecasting it will have major impact on another pollutant--carbon. The Clean Power Plan, EPA’s comprehensive regulation that governs carbon emissions from power plants, will be finalized this summer. Once in effect, the Plan will force states to move away from coal fire power production, an outcome conservatives on Capitol Hill and industry representatives have been fighting hard to prevent. These groups now claim Michigan v. EPA is the court’s warning to EPA to throw out, or at least reconsider, the Plan. According to them, the decision demonstrates the court’s unwillingness to defer to EPA when regulating coal fired power plants.   

Environmentalists, of course, disagree. They claim the narrow decision in Michigan v. EPA will have no impact on the Clean Power Plan, which arises under a different section of the Clean Air Act than the Mercury and Air Toxics Standards. For its part, EPA seems to embrace the environmentalists’ claims. The agency’s air chief, Janet McCabe, said in a blog post the day after the decision, that EPA “remains committed to finalizing the Clean Power Plan.” According to McCabe, the court’s decision “will have no bearing on the effort to reduce carbon pollution from the largest sources of emissions.”

But there is one point on which all sides agree--Michigan v. EPA demonstrates the court’s willingness to dive deep into the morass of the Clean Air Act in evaluating EPA’s actions. No doubt the court will do so again if asked to assess the legality of the Clean Power Plan. Only then will we know the full weight of Michigan v. EPA.