SUPREME COURT OF THE UNITED STATES
_________________
Nos. 14–46, 14–47, and 14–49
_________________
MICHIGAN, et al., PETITIONERS
14–46
v.
ENVIRONMENTAL PROTECTION AGENCY, et al.
UTILITY AIR REGULATORY GROUP, PETITIONER
14–47
v.
ENVIRONMENTAL PROTECTION AGENCY, et al.
NATIONAL MINING ASSOCIATION, PETITIONER
14–49
v.
ENVIRONMENTAL PROTECTION AGENCY, et al.
on writs of certiorari to the united states court of appeals for the district of columbia circuit
[June 29, 2015]
Justice Kagan, with whom Justice Ginsburg, Justice Breyer, and Justice Sotomayor join,dissenting.
The Environmental Protection Agency placed emissions limits on coal and oil power plants following a lengthy regulatory process during which the Agency carefully considered costs. At the outset, EPA determined that regulating plants’ emissions of hazardous air pollutants is “appropriate and necessary” given the harm they cause, and explained that it would take costs into account in developing suitable emissions standards. Next, EPA divided power plants into groups based on technological and other characteristics bearing significantly on their cost structures. It required plants in each group to match the emissions levels already achieved by the best-performing members of the same group—benchmarks necessarily reflecting those plants’ own cost analyses. EPA then adopted a host of measures designed to make compliance with its proposed emissions limits less costly for plants that needed to catch up with their cleaner peers. And with only one narrow exception, EPA decided not to impose any more stringent standards (beyond what some plants had already achieved on their own) because it found that doing so would not be cost-effective. After all that, EPA conducted a formal cost-benefit study which found that the quantifiable benefits of its regulation would exceed the costs up to nine times over—by as much as $80 billion each year. Those benefits include as many as 11,000 fewer premature deaths annually, along with a far greater number of avoided illnesses.
Despite that exhaustive consideration of costs, the Court strikes down EPA’s rule on the ground that the Agency “unreasonably . . . deemed cost irrelevant.”
Ante, at 15. On the majority’s theory, the rule is invalid because EPA did not explicitly analyze costs at the very first stage of the regulatory process, when making its “appropriate and necessary” finding. And that is so even though EPA later took costs into account again and again and . . . so on. The majority thinks entirely immaterial, and so entirely ignores, all the subsequent times and ways EPA considered costs in deciding what any regulation would look like.
That is a peculiarly blinkered way for a court to assess the lawfulness of an agency’s rulemaking. I agree with the majority—let there be no doubt about this—that EPA’s power plant regulation would be unreasonable if “[t]he Agency gave cost no thought
at all.”
Ante, at 5 (emphasis in original). But that is just not what happened here. Over more than a decade, EPA took costs into account at multiple stages and through multiple means as it set emissions limits for power plants. And when making its initial “appropriate and necessary” finding, EPA knew it would do exactly that—knew it would thoroughly consider the cost-effectiveness of emissions standards later on. That context matters. The Agency acted well within its authority in declining to consider costs at the opening bell of the regulatory process given that it would do so in every round thereafter—and given that the emissions limits finally issued would depend crucially on those accountings. Indeed, EPA could not have measured costs at the process’s initial stage with any accuracy. And the regulatory path EPA chose parallels the one it has trod in setting emissions limits, at Congress’s explicit direction, for every other source of hazardous air pollutants over two decades. The majority’s decision that EPA cannot take the same approach here—its micromanagement of EPA’s rulemaking, based on little more than the word “appropriate”—runs counter to Congress’s allocation of authority between the Agency and the courts. Because EPA reasonably found that it was “appropriate” to decline to analyze costs at a single stage of a regulatory proceeding otherwise imbued with cost concerns, I respectfully dissent
I
A
The Clean Air Act Amendments of 1990, as the majority describes, obligate EPA to regulate emissions of mercury and other hazardous air pollutants from stationary sources discharging those substances in large quantities. See
ante,
at 2.
For most industries, the statute prescribes the same multi-step regulatory process. At the initial stage, EPA must decide whether to regulate a source, based solely on the quantity of pollutants it emits and their health and environmental effects. See 42 U. S. C. §§7412(a)(1), (a)(2), (c)(1), (c)(3);
ante, at 2. Costs enter the equation after that, affecting the emissions limits that the eventual regulation will require. Under the statute, EPA must divide sources into categories and subcategories and then set “floor standards” that reflect the average emissions level already achieved by the best-performing 12% of sources within each group. See §7412(d)(3);
ante, at 3. Every 12% floor has cost concerns built right into it because the top sources, as successful actors in a market economy, have had to consider costs in choosing their own emissions levels. Moreover, in establishing categories and subcategories at this first stage, EPA can (significantly) raise or lower the costs of regulation for each source, because different classification schemes will alter the group—and so the emissions level—that the source has to match.[
1] Once the floor is set, EPA has to decide whether to impose any stricter (“beyond-the-floor”) standards, “taking into consideration,” among other things, “the cost of achieving such emissions reduction.” §7412(d)(2); see
ante,
at 3. Finally, by virtue of a longstanding Executive Order applying to significant rules issued under the Clean Air Act (as well as other statutes), the Agency must systematically assess the regulation’s costs and benefits. See Exec. Order No. 12866, 58 Fed. Reg. 51735, 51738, 51741 (1993) (applying to all rules with an annual economic effect of at least $100 million).
Congress modified that regulatory scheme for power plants. It did so because the 1990 amendments established a separate program to control power plant emissions contributing to acid rain, and many thought that just by complying with those requirements, plants might reduce their emissions of hazardous air pollutants to acceptable levels. See
ante, at 2. That prospect counseled a “wait and see” approach, under which EPA would give the Act’s acid rain provisions a chance to achieve that side benefit before imposing any further regulation. Accord-ingly, Congress instructed EPA to “perform a study of the hazards to public health reasonably anticipated” to result from power plants’ emissions after the 1990 amendments had taken effect. §7412(n)(1)(A). And Congress provided that EPA “shall regulate” those emissions only if the Agency “finds such regulation is appropriate and necessary after considering the results of the [public health] study.”
Ibid. Upon making such a finding, however, EPA is to regulate power plants as it does every other stationary source: first, by categorizing plants and setting floor standards for the different groups; then by deciding whether to regulate beyond the floors; and finally, by conducting the cost-benefit analysis required by Executive Order.
EPA completed the mandated health study in 1998, and the results gave much cause for concern. The Agency concluded that implementation of the acid rain provisions had failed to curb power plants’ emissions of hazardous air pollutants. Indeed, EPA found, coal plants were on track to increase those emissions by as much as 30% over the next decade. See 1 EPA, Study of Hazardous Air Pollutant Emissions from Electric Utility Steam Generating Units—Final Report to Congress, p. ES–25 (1998). And EPA determined, focusing especially on mercury, that the substances released from power plants cause substantial health harms. Noting that those plants are “the largest [non-natural] source of mercury emissions,”
id., §1.2.5.1, at 1–7,
EPA found that children of mothers exposed to high doses of mercury during pregnancy “have exhibited a variety of developmental neurological abnormalities,” including delayed walking and talking, altered muscles, and cerebral palsy.
Id., §7.2.2, at 7–17 to 7–18; see also 7 EPA, Mercury Study Report to Congress, p. 6–31 (1997) (Mercury Study) (estimating that 7% of women of childbearing age are exposed to mercury in amounts exceeding a safe level).
Informed by its public health study and additional data, EPA found in 2000 that it is “appropriate and necessary” to regulate power plants’ emissions of mercury and other hazardous air pollutants. 65 Fed. Reg. 79830.[
2] Pulling apart those two adjectives, the Agency first stated that such regulation is “appropriate” because those pollutants “present[ ] significant hazards to public health and the environment” and because “a number of control options” can “effectively reduce” their emission.
Ibid. EPA then determined
that regulation is “necessary” because other parts of the 1990 amendments—most notably, the acid rain provisions—“will not adequately address” those hazards.
Ibid. In less bureaucratic terms, EPA decided that it made sense to kick off the regulatory process given that power plants’ emissions pose a serious health problem, that solutions to the problem are available, and that the problem will remain unless action is taken.
B
If the regulatory process ended as well as started there, I would agree with the majority’s conclusion that EPA failed to adequately consider costs. Cost is almost always a relevant—and usually, a highly important—factor in regulation. Unless Congress provides otherwise, an agency acts unreasonably in establishing “a standard-setting proc-ess that ignore[s] economic considerations.”
Industrial Union Dept., AFL–CIO v.
American Petroleum Institute,
448 U. S. 607,
670 (1980)
(Powell, J., concurring in part and concurring in judgment). At a minimum, that is because such a process would “threaten[ ] to impose massive costs far in excess of any benefit.”
Entergy Corp. v.
Riverkeeper, Inc.,
556 U. S. 208,
234 (2009)
(Breyer, J., concurring in part and dissenting in part). And accounting for costs is particularly important “in an age of limited resources available to deal with grave environmental problems, where too much wasteful expenditure devoted to one problem may well mean considerably fewer resources available to deal effectively with other (perhaps more serious) problems.”
Id., at 233; see
ante, at 7. As the Court notes, that does not require an agency to conduct a formal cost-benefit analysis of every administrative action. See
ante, at 14. But (absent contrary indication from Congress) an agency must take costs into account in some manner before imposing significant regulatory burdens.
That proposition, however, does not decide the issue before us because the “appropriate and necessary” finding was only the beginning. At that stage, EPA knew that a lengthy rulemaking process lay ahead of it; the determination of emissions limits was still years away. And the Agency, in making its kick-off finding, explicitly noted that consideration of costs would follow: “As a part of developing a regulation” that would impose those limits, “the effectiveness and costs of controls will be examined.” 65 Fed. Reg. 79830. Likewise, EPA explained that, in the course of writing its regulation, it would explore regula-tory approaches “allowing for least-cost solutions.”
Id., at 79830–79831. That means the Agency, when making its “appropriate and necessary” finding, did not decline to consider costs as part of the regulatory process. Rather, it declined to consider costs at a single stage of that process, knowing that they would come in later on.
The only issue in these cases, then, is whether EPA acted reasonably in structuring its regulatory process in that way—in making its “appropriate and necessary finding” based on pollution’s harmful effects and channeling cost considerations to phases of the rulemaking in which emission levels are actually set. Said otherwise, the question is not whether EPA can reasonably find it “appropriate” to regulate without thinking about costs, full stop. It cannot, and it did not. Rather, the question is whether EPA can reasonably find it “appropriate” to trigger the regulatory process based on harms (and technological feasibility) alone, given that costs will come into play, in multiple ways and at multiple stages, before any emission limit goes into effect.
In considering that question, the very nature of the word “appropriate” matters. “[T]he word ‘appropriate,’ ” this Court has recognized, “is inherently context-dependent”: Giving it content requires paying attention to the surrounding circumstances.
Sossamon v.
Texas,
563 U. S. 277
, ___ (2011) (slip op., at 7). (That is true, too, of the word “necessary,” although the majority spends less time on it. See
Armour & Co. v.
Wantock,
323 U. S. 126
–130 (1944) (“[T]he word ‘necessary’ . . . has always been recognized as a word to be harmonized with its context”).) And here that means considering the place of the “appropriate and necessary” finding in the broader regulatory scheme—as a triggering mechanism that gets a complex rulemaking going. The interpretive task is thus at odds with the majority’s insistence on staring fixedly “at
this stage.”
Ante, at 11 (emphasis in original).
The task instead demands taking account of the entire regulatory process in thinking about what is “appropriate” in its first phase. The statutory language, in other words, is a directive to remove one’s blinders and view things whole—to consider what it is fitting to do at the threshold stage given
what will happen at every other.
And that instruction is primarily given to EPA, not to courts: Judges may interfere only if the Agency’s way of ordering its regulatory process is unreasonable—
i.e., something Congress would never have allowed. The question here, as in our seminal case directing courts to defer to agency interpretations of their own statutes, arises “not in a sterile textual vacuum, but in the context of implementing policy decisions in a technical and complex arena.”
Chevron U. S. A. Inc. v.
Natural Resources DefenseCouncil, Inc.,
467 U. S. 837,
863 (1984)
. EPA’s experience and expertise in that arena—and courts’ lack of those attributes—demand that judicial review proceed with caution and care. The majority actually phrases this principle well, though honors it only in the breach: Within wide bounds, it is “up to the Agency to decide . . . how to account for cost.”
Ante, at 14.
That judges might have made different regulatory choices—might have considered costs in different ways at different times—will not suffice to overturn EPA’s action where Congress, as here, chose not to speak directly to those matters, but to leave them to the Agency to decide.
All of that means our decision here properly rests on something the majority thinks irrelevant: an understanding of the full regulatory process relating to power plants and of EPA’s reasons for considering costs only after making its initial “appropriate and necessary” finding. I therefore turn to those issues, to demonstrate the simple point that should resolve these cases: that EPA, in regulating power plants’ emissions of hazardous air pollutants, accounted for costs in a reasonable way.
II
A
In the years after its “appropriate and necessary” finding, EPA made good on its promise to account for costs “[a]s a part of developing a regulation.” 65 Fed. Reg. 79830; see
supra, at 7. For more than a decade, as EPA deliberated on and then set emissions limits, costs came into the calculus at nearly every turn. Reflecting that consideration, EPA’s final rule noted that steps taken during the regulatory process had focused on “flexib[ility] and cost-effective[ness]” and had succeeded in making “the rule less costly and compliance more readily manageable.” 77 Fed. Reg. 9306, 9376. And the regulation concluded that “the benefits of th[e] rule” to public health and the environment “far outweigh the costs.”
Id., at 9306.
Consistent with the statutory framework, EPA initially calculated floor standards: emissions levels of the best-performing 12% of power plants in a given category or subcategory. The majority misperceives this part of the rulemaking process. It insists that EPA “must promulgate certain . . . floor standards no matter the cost.”
Ante, at 11. But that ignores two crucial features of the top-12% limits: first, the way in which any such standard intrinsically accounts for costs, and second, the way in which the Agency’s categorization decisions yield different standards for plants with different cost structures.
The initial point is a fact of life in a market economy: Costs necessarily play a role in any standard that uses power plants’ existing emissions levels as a benchmark. After all, the best-performing 12% of power plants must have considered costs in arriving at their emissions outputs; that is how profit-seeking enterprises make decisions. And in doing so, they must have selected achievable levels; else, they would have gone out of business. (The same would be true even if other regulations influenced some of those choices, as the majority casually speculates. See
ante, at 13.) Indeed, this automatic accounting for costs is why Congress adopted a market-leader-based standard. As the Senate Report accompanying the 1990 amendments explained: “Cost considerations are reflected in the selection of emissions limitations which have been achieved in practice (rather than those which are merely theoretical) by sources of a similar type or character.” S. Rep. No. 101–228, pp. 168–169 (1989). Of course, such a standard remains technology-forcing: It requires laggards in the industry to catch up with frontrunners, sometimes at significant expense. But the benchmark is, by definition, one that some power plants have achieved economically. And when EPA made its “appropriate and necessary” finding, it knew that fact—knew that the consequence of doing so was to generate floor standards with cost considerations baked right in.
Still more, EPA recognized that in making categorization decisions, it could take account of multiple factors related to costs of compliance—and so avoid impracticable regulatory burdens. Suppose, to use a simple example, that curbing emissions is more technologically difficult—and therefore more costly—for plants burning coal than for plants burning oil. EPA can then place those two types of plants in different categories, so that coal plants need only match other coal plants rather than having to incur the added costs of meeting the top oil plants’ levels. Now multiply and complexify that example many times over. As the Agency noted when making its “appropriate and necessary” finding, EPA “build[s] flexibility” into the regulatory regime by “bas[ing] subcategorization on . . . the size of a facility; the type of fuel used at the facility; and the plant type,” and also “may consider other relevant factors such as geographic conditions.” 65 Fed. Reg. 79830; see S. Rep. No. 101–228, at 166 (listing similar factors and noting that “[t]he proper definition of categories . . . will assure maximum protection of public health and the environment while minimizing costs imposed on the regulated community”). Using that classification tool, EPA can ensure that plants have to attain only the emissions levels previously achieved by peers facing comparable cost constraints, so as to further protect plants from unrealistic floor standards.
And that is exactly what EPA did over the course of its rulemaking process, insisting on apples-to-apples comparisons that bring floor standards within reach of diverse kinds of power plants. Even in making its “appropriate and necessary” finding, the Agency announced it would divide plants into the two categories mentioned above: “coal-fired” and “oil-fired.” 65 Fed. Reg. 79830.[
3] Then, as the rulemaking progressed, EPA went further. Noting that different technologies significantly affect the ease of attaining a given emissions level, the Agency’s proposed rule subdivided those two classes into five: plants designed to burn high-rank coal; plants designed to burn low-rank virgin coal; plants that run on a technology termed integrated gasification combined cycle; liquid oil units; and solid oil units. See 76 Fed. Reg. 25036–25037. EPA explained that by subcategorizing in that way, it had spared many plants the need to “retrofit[ ],” “redesign[ ],” or make other “extensive changes” to their facilities.
Id., at
25036. And in its final rule, EPA further refined its groupings in ways that eased compliance. Most notably, the Agency established a separate subcategory, and attendant (less stringent) floor, for plants in Hawaii, Puerto Rico, Guam, and the Virgin Islands on the ground that plants in those places have “minimal control over the quality of available fuel[ ] and disproportionately high operational and maintenance costs.” 77 Fed. Reg. 9401.[
4]
Even after establishing multiple floor standards that factored in costs, EPA adopted additional “compliance options” to “minimize costs” associated with attaining a given floor—just as its “appropriate and necessary” finding explicitly contemplated.
Id., at 9306; 76 Fed. Reg. 25057; see 65 Fed. Reg. 79830. For example, the Agency calculated each floor as both an “input-based” standard (based on emissions per unit of energy
used) and an“output-based” standard (based on emissions per unit of use-ful energy
produced), and allowed plants to choose which standard they would meet. That option, EPA explained, can “result in . . . reduced compliance costs.” 76 Fed. Reg. 25063. Similarly, EPA allowed plants to meet a given 12% floor by averaging emissions across all units at the same site, instead of having to meet the floor at each unit. Some plants, EPA understood, would find such averaging a “less costly alternative.” 77 Fed. Reg. 9385. Yet again: EPA permitted “limited use” plants—those primarily burning natural gas but sometimes switching to oil—to comply with the final rule by meeting qualitative “work practice standards” rather than numeric emissions limits.
Id., at 9400–9401. EPA explained that it would be “economically impracticable” for those plants to demonstrate compliance through emissions testing, and that an alternative standard, focused on their adoption of pollution control techniques, would allow them to both reduce emissions and avoid “extra cost.”
Id., at 9401. And the list goes on. See,
e.g.,
id., at 9409–9410 (allowing extra year for plants to comply with emissions limits where “source-specific construction, permitting, or labor, procurement or resource challenges” arise);
id., at 9417 (describing additional “compliance options”).
With all that cost-consideration under its belt, EPA next assessed whether to set beyond-the-floor standards, and here too, as it knew it would, the Agency took costs into account. For the vast majority of coal and oil plants, EPA decided that beyond-the-floor standards would not be “reasonable after considering costs.”
Id., at 9331. The Agency set such a standard for only a single kind of plant, and only after determining that the technology needed to meet the more lenient limit would also achieve the more stringent one. See
id., at 9393; 76 Fed. Reg. 25046–25047. Otherwise, EPA determined, the market-leader-based standards were enough.
Finally, as required by Executive Order and as anticipated at the time of the “appropriate and necessary” finding, EPA conducted a formal cost-benefit analysis of its new emissions standards and incorporated those findings into its proposed and final rules. See
id., at 25072–25078; 77 Fed. Reg. 9305–9306, 9424–9432. That analysis estimated that the regulation’s yearly costs would come in at under $10 billion, while its annual measureable benefits would total many times more—between $37 and $90 billion. See
id., at 9305–9306;
ante, at 4. On the costs side, EPA acknowledged that plants’ compliance with the rule would likely cause electricity prices to rise by about 3%, but projected that those prices would remain lower than they had been as recently as 2010. See 77 Fed. Reg. 9413–9414. EPA also thought the rule’s impact on jobs would be about a wash, with jobs lost at some high-emitting plants but gained both at cleaner plants and in the pollution control industry. See
ibid. On the benefits side, EPA noted that it could not quantify many of the health gains that would result from reduced mercury exposure. See
id., at 9306. But even putting those aside, the rule’s annual benefits would include between 4,200 and 11,000 fewer premature deaths from respiratory and cardiovascular causes, 3,100 fewer emergency room visits for asthmatic children, 4,700 fewer non-fatal heart attacks, and 540,000 fewer days of lost work. See
id., at 9429.
Those concrete findings matter to these cases—which, after all, turn on whether EPA reasonably took costs into account in regulating plants’ emissions of hazardous air pollutants. The majority insists that it may ignore EPA’s cost-benefit analysis because “EPA did not rely on” it when issuing the initial “appropriate and necessary” finding.
Ante, at 15 (quoting Solicitor General); see also
SEC v.
Chenery Corp.,
318 U. S. 80
–94 (1943). At one level, that description is true—indeed, a simple function of chronology: The kick-off finding preceded the cost-benefit analysis by years and so could not have taken its conclusions into account. But more fundamentally, the majority’s account is off, because EPA knew when it made that finding that it would consider costs at every subsequent stage, culminating in a formal cost-benefit study. And EPA knew that, absent unusual circumstances, the rule would need to pass that cost-benefit review in order to issue. See Exec. Order No. 12866, 58 Fed. Reg. 51736 (“Each agency shall . . . adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs”). The reasonableness of the Agency’s decision to consider only the harms of emissions at the threshold stage must be evaluated in that broader context. And in thinking about that issue, it is well to remember the outcome here: a rule whose benefits exceed its costs by three to nine times. In making its “appropriate and necessary” finding, EPA had committed to assessing and mitigating costs throughout the rest of its rulemaking; if nothing else, the findings of the Agency’s cost-benefit analysis—making clear that the final emissions standards were cost-effective—show that EPA did just that.
B
Suppose you were in charge of designing a regulatory process. The subject matter—an industry’s emissions of hazardous material—was highly complex, involving multivarious factors demanding years of study. Would you necessarily try to do everything at once? Or might you try to break down this lengthy and complicated process into discrete stages? And might you consider different factors, in different ways, at each of those junctures? I think you might. You know that everything must get done in the end—every relevant factor considered. But you tend to think that “in the end” does not mean “in the beginning.” And you structure your rulemaking process accordingly, starting with a threshold determination that does not mirror your end-stage analysis. Would that be at least (which is all it must be) a “reasonable policy choice”?
Chevron, 467 U. S., at 845.
That is the question presented here, and it nearly answers itself. Setting emissions levels for hazardous air pollutants is necessarily a lengthy and complicated process, demanding analysis of many considerations over many years. Costs are a key factor in that process: As I have said, sensible regulation requires careful scrutiny of the burdens that potential rules impose. See
supra, at 6–7. But in ordering its regulatory process, EPA knew it would have the opportunity to consider costs in one after another of that rulemaking’s stages—in setting the level of floor standards, in providing a range of options for plants to meet them, in deciding whether or where to require limits beyond the floor, and in finally completing a formal cost-benefit analysis. See 65 Fed. Reg. 79830–79831;
supra, at 9–15. Given that context, EPA reasonably decided that it was “appropriate”—once again, the only statutory requirement relevant here—to trigger the regulatory process based on the twin findings that the emissions in question cause profound health and environmental harms and that available pollution control technologies can reduce those emissions. By making that decision, EPA did no more than commit itself to developing a realistic and cost-effective regulation—a rule that would take account of every relevant factor, costs and benefits alike. And indeed, particular features of the statutory scheme here indicate that EPA’s policy choice was not just a minimally reasonable option but an eminently reasonable one.
To start, that decision brought EPA’s regulation of power plants into sync with its regulation of every other significant source of hazardous pollutants under the Clean Air Act. For all those types of sources (totaling over 100), the Act instructs EPA to make the threshold decision to regulate based solely on the quantity and effects of pollutants discharged; costs enter the picture afterward, when the Agency takes up the task of actually establishing emissions limits. See
supra, at 3–4. Industry after industry, year after year, EPA has followed that approach to standard-setting, just as Congress contemplated. See,
e.g., 58 Fed. Reg. 49354 (1993) (dry cleaning facilities); 59 Fed. Reg. 64303 (1994) (gasoline distributors); 60 Fed. Reg. 45948 (1995) (aerospace manufacturers). And apparently with considerable success. At any rate, neither those challenging this rule nor the Court remotely suggests that these regulatory regimes have done “significantly more harm than good.”
Ante, at 7. So when making its “appropriate and necessary” finding for power plants, EPA had good reason to continue in the same vein. See,
e.g.,
Entergy, 556 U. S., at 236 (opinion of Breyer, J.) (noting that the reasonableness of an agency’s approach to considering costs rests in part on whether that tack has met “with apparent success in the past”).
And that is exactly how EPA explained its choice. Stating that it would consider the “costs of controls” when “developing a regulation,” the Agency noted that such an “approach has helped build flexibility in meeting environmental objectives in the past,” thereby preventing the imposition of disproportionate costs. 65 Fed. Reg. 79830. Indeed, as EPA further commented in issuing its rule, it would seem “inequitable to impose a regulatory regime on every industry in Amer-ica and then to exempt one category” after finding it repre-sented “a significant part of the air toxics problem.” 77 Fed. Reg. 9322 (quoting 136 Cong. Rec. 36062 (1990) (statement of Sen. Durenberger)).
The majority’s attempt to answer this point founders on even its own statement of facts. The majority objects that “the whole point of having a separate provision about power plants” is to “treat[ ] power plants
differently from other stationary sources.”
Ante, at 11 (emphasis in original).
But turn back about 10 pages, and read what the majority says about
why Congress treated power plants differently: because, as all parties agree, separate regulatory requirements involving acid rain “were expected to have the collateral effect of reducing power plants’ emissions of hazardous air pollutants, although the extent of the reduction was unclear.”
Ante, at 2; see
supra, at 4–5.
For that reason alone (the majority does not offer any other), Congress diverted EPA from its usual regulatory path, instructing the Agency, as a preliminary matter, to complete and consider a study about the residual harms to public health arising from those emissions. See
ante, at 2–3;
supra, at 5. But once EPA found in its study that the acid rain provisions would not significantly affect power plants’ emissions of hazardous pollutants, any rationale for treating power plants differently from other sources discharging the same substances went up in smoke. See 65 Fed. Reg. 79830. At that point, the Agency would have had far more explaining to do if, rather than following a well-tested model, it had devised a new scheme of regulation for power plants only.
Still more, EPA could not have accurately assessed costs at the time of its “appropriate and necessary” finding. See 8 Mercury Study, at 6–2 (noting the “many uncertainties” in any early-stage analysis of pollution control costs). Under the statutory scheme, that finding comes before—years before—the Agency designs emissions standards. And until EPA knows what standards it will establish, it cannot know what costs they will impose. Nor can those standards even be reasonably guesstimated at such an early stage. Consider what it takes to set floor standards alone. First, EPA must divide power plants into categories and subcategories; as explained earlier, those classification decisions significantly affect what floors are established. See
supra, at 4, and n. 1, 11–12. And then, EPA must figure out the average emissions level already achieved by the top 12% in each class so as to set the new standards. None of that can realistically be accomplished in advance of the Agency’s regulatory process: Indeed, those steps are the very stuff of the rulemaking. Simi-larly, until EPA knows what “compliance options” it will develop, it cannot know how they will mitigate the costs plants must incur to meet the floor standards. See
supra, at 13–14. And again, deciding on those options takes substantial time. So there is good reason for different considerations to go into the threshold finding than into the final rule. Simply put, calculating costs before starting to write a regulation would put the cart before the horse.
III
The central flaw of the majority opinion is that it ignores everything but one thing EPA did. It forgets that EPA’s “appropriate and necessary” finding was only a first step which got the rest of the regulatory process rolling. It narrows its field of vision to that finding in isolation, with barely a glance at all the ways in which EPA later took costs into account. See
supra, at 10–11 (in establishing floor standards);
supra, at 13–14 (in adopting compliance options);
supra, at 14 (in deciding whether to regulate beyond the floor);
supra, at 14–15 (in conducting a formal cost-benefit analysis as a final check). In sum, the major-ity disregards how consideration of costs infused the regulatory process, resulting not only in EPA’s adoption of mitigation measures,
ante, at 13–14, but also in EPA’s crafting of emissions standards that succeed in producing benefits many times their price.
That mistake accounts for the majority’s primary argument that the word “appropriate,” as used in §7412(n)(1)(A), demands consideration of costs. See
ante,
at 6–7. As I have noted, that would be true if the “appropriate and necessary” finding were the only step before imposing regulations on power plants. See
supra, at 6–7. But, as should be more than clear by now, it was just the first of many: Under the Clean Air Act, a long road lay ahead in which the Agency would have more—and far better—opportunities to evaluate the costs of diverse emissions standards on power plants, just as it did on all other sources. See
supra, at 4, 7, 9–15. EPA well understood that fact: “We evaluate the terms ‘appropriate’ and ‘necessary,’ ” it explained, in light of their “statutory context.” 76 Fed. Reg. 24986. And EPA structured its regulatory process accordingly, with consideration of costs coming (multiple times) after the threshold finding. The only way the majority can cast that choice as unreasonable, given the deference this Court owes to such agency decisions, is to blind itself to the broader rulemaking scheme.
The same fault inheres in the majority’s secondary argument that EPA engaged in an “interpretive gerrymander[ ]” by considering environmental effects but not costs in making its “appropriate and necessary” finding.
Ante, at 8–9. The majority notes—quite rightly—that Congress called for EPA to examine both subjects in a study of mercury emissions from all sources (separate from the study relating to power plants’ emissions alone). See
ante, at 8.
And the majority states—again, rightly—that Congress’s demand for that study “provides direct evidence that Congress was concerned with [both] environmental effects [and] cost.”
Ante, at 9 (internal quotation marks omitted). But nothing follows from that fact, because EPA too was concerned with both. True enough, EPA assessed the two at different times: environmental harms (along with health harms) at the threshold, costs afterward. But that was for the very reasons earlier described: because EPA wanted to treat power plants like other sources and because it thought harms, but not costs, could be accurately measured at that early stage. See
supra, at 17–20. Congress’s simple request for a study of mercury emissions in no way conflicts with that choice of when and how to consider both harms and costs. Once more, the majority perceives a conflict only because it takes so partial a view of the regulatory process.
And the identical blind spot causes the majority’s sports-car metaphor to run off the road. The majority likens EPA to a hypothetical driver who decides that “it is ‘appropriate’ to buy a Ferrari without thinking about cost, because he plans to think about cost later when deciding whether to upgrade the sound system.”
Ante, at 11. The comparison is witty but wholly inapt. To begin with, emissions limits are not a luxury good: They are a safety measure, designed to curtail the significant health and environmental harms caused by power plants spewing hazardous pollutants. And more: EPA knows from past experience and expertise alike that it will have the opportunity to purchase that good in a cost-effective way. A better analogy might be to a car owner who decides without first checking prices that it is “appropriate and necessary” to replace her worn-out brake-pads, aware from prior experience that she has ample time to comparison-shop and bring that purchase within her budget. Faced with a serious hazard and an available remedy, EPA moved forward like that sensible car owner, with a promise that it would, and well-grounded confidence that it could, take costs into account down the line.
That about does it for the majority’s opinion, save for its final appeal to
Chenery—and
Chenery cannot save its holding. See
ante, at 14. Of course a court may not uphold agency action on grounds different from those the agency gave. See
Chenery, 318 U. S., at 87. But equally, a court may not strike down agency action without considering the reasons the agency gave.
Id., at 95. And that is what the majority does. Indeed, it is difficult to know what agency document the majority is reading. It denies that “EPA said . . . that cost-benefit analysis would be deferred until later.”
Ante, at 13. But EPA said exactly that: The “costs of controls,” the Agency promised, “will be examined” as “a part of developing a regulation.” 65 Fed. Reg. 79830. Tellingly, these words appear nowhere in the majority’s opinion. But what are they other than a statement that cost concerns, contra the majority, are
not “irrelevant,”
ante, at 13 (without citation)—that they are simply going to come in later?
And for good measure, EPA added still extra explanation. In its “appropriate and necessary” finding, the Agency committed to exploring “least-cost solutions” in “devel-oping a standard for utilities.” 65 Fed. Reg. 79830. The Agency explained that such an approach—particularly mentioning the use of averaging and subcategorization—had offered “opportunit[ies] for lower cost solutions” and “helped build flexibility in meeting environmental objectives in the past.”
Ibid.; see
supra, at 7, 18
. Then, in issuing its proposed and final rules, EPA affirmed that it had done just what it said. EPA recognized that standard-setting must “allow the industry to make practical investment decisions that minimize costs.” 76 Fed. Reg. 25057. Accordingly, the Agency said, it had “provid[ed] flexibility and compliance options” so as to make the rule “less costly” for regulated parties. 77 Fed. Reg. 9306. EPA added that it had rejected beyond-the-floor standards for almost all power plants because they would not be “reasonable after considering costs.”
Id., at 9331. And it showed the results of a formal analysis finding that the rule’s costs paled in comparison to its benefits. In sum, EPA concluded, it had made the final standards “cost-efficient.”
Id., at 9434. What more would the majority have EPA say?
IV
Costs matter in regulation. But when Congress does not say how to take costs into account, agencies have broad discretion to make that judgment. Accord,
ante, at 14 (noting that it is “up to the Agency to decide (as always, within the limits of reasonable interpretation) how to account for cost”).
Far more than courts, agencies have the expertise and experience necessary to design regula-tory processes suited to “a technical and complex arena.”
Chevron, 467 U. S., at 863. And in any event, Congress has entrusted such matters to them, not to us.
EPA exercised that authority reasonably and responsibly in setting emissions standards for power plants. The Agency treated those plants just as it had more than 100 other industrial sources of hazardous air pollutants, at Congress’s direction and with significant success. It made a threshold finding that regulation was “appropriate and necessary” based on the harm caused by power plants’ emissions and the availability of technology to reduce them. In making that finding, EPA knew that when it decided what a regulation would look like—what emissions standards the rule would actually set—the Agency would consider costs. Indeed, EPA expressly promised to do so. And it fulfilled that promise. The Agency took account of costs in setting floor standards as well as in thinking about beyond-the-floor standards. It used its full kit of tools to minimize the expense of complying with its proposed emissions limits. It capped the regulatory proc-ess with a formal analysis demonstrating that the bene-fits of its rule would exceed the costs many times over. In sum, EPA considered costs all over the regulatory process, except in making its threshold finding—when it could not have measured them accurately anyway. That approach is wholly consonant with the statutory scheme. Its adoption was “up to the Agency to decide.”
Ante, at 14.
The majority arrives at a different conclusion only by disregarding most of EPA’s regulatory process. It insists that EPA must consider costs—when EPA did just that, over and over and over again. It concedes the importance of “context” in determining what the “appropriate and necessary” standard means, see ante, at 7, 10—and then ignores every aspect of the rulemaking context in which that standard plays a part. The result is a decision that deprives the Agency of the latitude Congress gave it to design an emissions-setting process sensibly accounting for costs and benefits alike. And the result is a decision that deprives the American public of the pollution control measures that the responsible Agency, acting well within its delegated authority, found would save many, many lives. I respectfully dissent.