Energy v. Water

The role of economics in environmental regulation lies at the heart of the Supreme Court's 2009 decision in Entergy Corporation v. Riverkeeper. In Riverkeeper, the Supreme Court determined that the Environmental Protection Agency (EPA) has the authority to conduct cost-benefit analysis when promulgating technology standards for cooling water intake structures at existing power plants pursuant to the Clean Water Act. Like many environmental regulations, the Clean Water Act is silent on the use of such analysis. Writing for the majority, Justice Scalia interpreted the Act to permit the EPA's reliance on cost-benefit analysis. As Justice Breyer posits in his concurrence, in times of limited resources and dire environmental problems it is wasteful to force an industry to spend billions to save one more fish while those resources may be more wisely spent resolving other environmental woes. This Note argues that such an approach can only work when the environmental woes are properly defined. In the case at hand, the EPA grossly oversimplified the environmental problem and financial burdens and thus miscalculated the environmental and financial benefits of the best technology available. By ignoring the environmental harm caused by power plant water use and consumption, the EPA did not factor in the potentially huge environmental benefits of restoring instream flows and the financial and social benefit of averting a crisis in the energy-water nexus.