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Highlights

Mercury is a toxic element that can cause neurological disorders in children. In January 2004, the Environmental Protection Agency (EPA) proposed two options for limiting mercury from power plants, and plans to finalize a rule in March 2005. The first would require each plant to meet emissions standards reflecting the application of control technology (the technology-based option), while the second would enable plants to either reduce emissions or buy excess credits from other plants (the cap-and-trade option). EPA received over 680,000 written comments on the proposal. EPA is directed by statute and executive order to analyze the costs and benefits of proposed rules, and the agency summarized its analysis underlying the two options in the proposal. In this context, GAO was asked to assess the usefulness of EPA's economic analysis for decision making. In doing so, GAO neither independently estimated the options' costs and benefits nor evaluated the process for developing the options or their consistency with the Clean Air Act, as amended.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Environmental Protection Agency To improve the usefulness of the agency's economic analysis for informing decision makers and the public, and to help ensure consistency with OMB guidance for economic analysis and as the agency revises its economic analysis prior to selecting a mercury control option, the EPA Administrator should analyze and fully document the economic effects of each policy option by itself, as well as in combination with the interstate rule, over their full implementation periods.
Closed - Not Implemented
EPA did not implement this recommendation in its 2005 Clean Air Mercury Rule. This rule has been vacated by the courts, and EPA is now developing new rule. However, the proposed rule and supporting documentation will not be completed until 2010 or 2011.
Environmental Protection Agency To improve the usefulness of the agency's economic analysis for informing decision makers and the public, and to help ensure consistency with OMB guidance for economic analysis and as the agency revises its economic analysis prior to selecting a mercury control option, the EPA Administrator should ensure that the agency documents its analysis supporting the final rule and consistently analyzes the effect that different levels of mercury control would have on cost-and-benefit estimates under each policy option.
Closed - Not Implemented
EPA did not implement this recommendation in its 2005 Clean Air Mercury Rule. This rule has been vacated by the courts, and EPA is now developing new rule. However, the proposed rule and supporting documentation will not be completed until 2010 or 2011.
Environmental Protection Agency To improve the usefulness of the agency's economic analysis for informing decision makers and the public, and to help ensure consistency with OMB guidance for economic analysis and as the agency revises its economic analysis prior to selecting a mercury control option, the EPA Administrator should include monetary estimates, where possible, of the human health benefits of reductions in mercury emissions from power plants or, at a minimum, provide qualitative information on how these benefits are likely to compare under the two options over a consistent time frame, reflecting full implementation of both options.
Closed - Not Implemented
EPA did not implement this recommendation in its 2005 Clean Air Mercury Rule. This rule has been vacated by the courts, and EPA is now developing new rule. However, the proposed rule and supporting documentation will not be completed until 2010 or 2011.
Environmental Protection Agency To improve the usefulness of the agency's economic analysis for informing decision makers and the public, and to help ensure consistency with OMB guidance for economic analysis and as the agency revises its economic analysis prior to selecting a mercury control option, the EPA Administrator should further analyze uncertainties surrounding estimates of costs and benefits, as directed by OMB guidance, and evaluate how these uncertainties could affect overall estimates of the rule's impacts.
Closed - Not Implemented
EPA did not implement this recommendation in its 2005 Clean Air Mercury Rule. This rule has been vacated by the courts, and EPA is now developing new rule. However, the proposed rule and supporting documentation will not be completed until 2010 or 2011.

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