Two years ago, on December 22, 2008, a dike broke at an ash pond near the Tennessee Valley Authority’s Kingston (Tennessee) coal plant, releasing a billion gallons of coal ash slurry. Some 300 acres were inundated, twelve houses were flooded, and local rivers were contaminated with high levels of lead and other toxic heavy metals.
Each year, U.S. power plants produce more than 100 million tons of coal combustion residues. Much of that waste is mixed with water and kept in clay-lined ponds, like the one that failed at Kingston. You’d think that ash disposal was carefully regulated, wouldn’t you? That is, unless you remembered that coal ash is produced by a very powerful industry.
Since 1980, coal ash has been excluded from regulation as a hazardous waste – although EPA is mandated to study the risks associated with coal ash. EPA found that coal ash wasn’t hazardous in 1993, and again in 2000. But the Kingston spill occurred just as the Obama administration was starting up, and EPA Administrator Lisa Jackson decided to try again.
This time around, EPA proposed classifying coal ash as a hazardous waste, which means relatively strict federal regulation of disposal under Subtitle C of the Resource Conservation and Recovery Act (RCRA). The coal and electric power industries pressed for looser regulation under RCRA’s Subtitle D, which covers non-hazardous wastes such as municipal garbage, and leaves enforcement to the states. Under pressure from the Office of Management and Budget, EPA backpedaled and offered both alternatives for comment earlier this year.
At the request of Earthjustice and the Environmental Integrity Project, Elizabeth A. Stanton and I evaluated EPA’s cost-benefit calculations. We found EPA’s work to be full of mistakes, large and small – as well as suffering from the unavoidable limitations of cost-benefit analysis. (See our testimony, or a 4-page summary of it.)
As I’ve written elsewhere, cost-benefit analysis is inherently flawed. In the coal ash case, as usual, it is easier to develop a complete calculation of costs than of benefits. The costs of environmental protection involve engineering estimates and construction costs, areas where hard numbers are available. The benefits, on the other hand, include protection of life, health, and the natural environment, which are of great importance but have no meaningful price tags.
Thus EPA’s analysis was a biased comparison of relatively complete costs versus very incomplete benefits. Many categories of health and environmental benefits of regulation were omitted from the calculations. Nonetheless, in every variant of the analysis (there are more variants than you want to know about), after we corrected EPA’s mistakes, strict regulation under Subtitle C either looked the best for society, or would look the best with a very small value assigned to the missing benefits.
The hottest controversies involve coal ash reuse. Some coal combustion residues are used to make cement, wallboard, and other construction products – thereby substituting for virgin materials and reducing industry’s air emissions. We found that EPA’s calculations gave far too much credit to ash reuse for the reduction of air pollution in cement and other industries. EPA double-counted emission reductions that are already scheduled to occur under Clean Air Act rules, and mistakenly treated all particulate matter as if it were the most dangerous (smallest) variety. Reuse of coal ash is a good idea, clearly preferable to disposal in Kingston-style ponds – but it’s not as incredibly good as EPA’s estimates suggest.
The coal industry believes that Subtitle C regulation would destroy the market for coal ash reuse, causing immense economic losses. Even though reuse is explicitly exempted from Subtitle C, industry assumes that a stigma of (inaccurate) association with hazardous waste would decimate ash reuse for decades to come. EPA analyzed this scenario, although their heart wasn’t in it; they also presented arguments against the stigma hypothesis. Many products – gasoline, nail polish, and some household cleaning products, among others – are widely used without stigma, although they would be hazardous wastes if disposed of in bulk. There is no objective evidence for the size, duration, or even existence of the Subtitle C “stigma”; it is based solely on assertions by industry representatives, who are hardly disinterested observers.
Accepting the stigma argument would set a terrible precedent for future regulatory decisions. Why worry about the details of actual costs, when it’s so easy to make up a story about enormous, imagined “stigma” effects? Cost-benefit analysis, for all its existing flaws, could become much worse if it devolves into story-telling about stigmas and hypothetical harms to future markets. Surely the Obama administration won’t give in on this – will they?