Co-benefits, Costs, and Concoctions, Oh My
Co-benefits, costs, and contortions, Oh My.
On June 17th, 2025, the Trump administration published its Proposed Rule to repeal the Biden administration’s regulations on greenhouse gas emissions on coal and natural gas power plants. This rule was formally entitled the “Repeal of Greenhouse Gas Emissions Standards for Fossil Fuel-Fired Electric Generating Units.”
Last week, we described how repealing these regulations would yield $404.1 billion in benefits in the Midcontinent Independent System Operator (MISO) region through 2055, which was far higher than the $19 billion estimated by the Trump administration because they used a fatally flawed bait-and-switch baseline.
However, there was a bigger issue with the Regulatory Impact Analysis (RIA) produced by the administration to justify the regulations than the lack of benefits: it showed the rules would impose a net cost on society due to $76 billion to $130 billion in economic damages from higher emissions of criteria pollutants, jeopardizing the legal standing of the rules under the Administrative Procedure Act and making it more vulnerable to legal challenges from climate advocates.
Thankfully, our modeling found that the Trump Administration’s proposal would result in $314.6 billion in net benefits in the MISO region through 2055, even when we account for the higher emissions of criteria pollutants.
Cooking the Books on Costs with Co-Benefits
When looking at the economic impact of rules like these, the standard practice is to weigh the benefits of less spending for the future grid against the costs of higher emissions of things like small particulates (PM2.5), nitrous oxides (NOx), and sulfur oxides (SOx), and also greenhouse gas (GHG) emissions.
However, the Biden administration’s cost/benefit analysis of their final GHG rules on power plants relied heavily on the calculation of co-benefits from reducing emissions of PM2.5, NOx, and SOx, as well as climate benefits from reducing greenhouse gases to make their regulations pencil out. There are serious shortcomings to this approach.
Improvements in current emissions reduction technology on existing power plants mean they emit very few pollutants already. EPA data show the vast majority of states, particularly those in the MISO region, are already in compliance with the National Ambient Air Quality Standards (NAAQS) established for these emissions, which are designed to protect even the most vulnerable populations, such as children and the elderly.
As such, the EPA’s supposition that reducing emissions below levels already considered safe for the most vulnerable populations makes no sense, as our friend Dr.
wrote in his comments to the EPA:“The vast majority of health benefits due to PM2.5 and ozone emissions reductions in the 2024 rule are derived from reductions in pollution in areas that already meet the National Ambient Air Quality Standards (NAAQS). Consider that the entire country is in attainment for the current PM2.5 NAQQS except for five counties, comprising less than 10 percent of the country’s population (mostly in Southern California). About a third of the country lives in counties that are in nonattainment for ozone.”
The idea that health impacts below the NAAQS should be counted as co-benefits or costs in RIAs that do not regulate those pollutants is at odds with the CAA itself, which dictates that the NAAQS be “requisite to protect the public health” with “an adequate margin of safety.” If there are such enormous benefits to be derived from reducing pollution in areas that meet the NAAQS, then why are the NAAQS not set lower? Or conversely, how can the EPA quantify such benefits when pollution levels are already so low?
Furthermore, according to the Minnesota Pollution Control Agency, the worst air quality days in Minnesota for 2024, a state within MISO, were “associated with several intrusions of wildfire smoke from Canada. The Air Quality Index (AQIs) reached Red during smoke intrusions in mid-May and mid-September and reached Orange on a few days between mid-August and early September.”
Lastly, the EPA uses the linear no-threshold (LNT) model to determine health impacts at levels far below the levels measured in toxicology and epidemiology studies, meaning many of these benefits may very well be overstated or even non-existent.
Crunching the Costs of Criteria Pollutants
Our modeling found that emissions of criteria pollutants will rise in the Trump Proposal relative to the Avoiding Biden Blackouts scenario, as it utilizes more coal and natural gas power plants throughout the model run.
We calculated the increase in emissions and their associated cost of the increased emissions, relative to the Avoiding Biden Blackouts scenario, using average emissions rates for U.S. coal and natural gas power plants from the U.S. Energy Information Administration. We applied an average tons per MWh emissions factor to each MWh of electricity generated in the MISO region under the Trump Proposal.
The table below shows the additional tons of NOx, SOx, and PM2.5 emissions from coal and natural gas plants in the Trump Proposal scenario. We multiplied these figures by the EPA’s cost per ton estimates to get an additional cost of emissions through 2055, discounted at 3.76 percent.
Our analysis concluded that, using the EPA’s own cost estimates for emissions, emissions would increase the cost of the modeled MISO grid in the Trump Proposal by an additional $246.1 billion through 2055, shown in the graph below.
This means that even when accounting for the cost of increased emissions in the Trump Proposal, repealing the Obama and Biden greenhouse gas regulations on coal and natural gas plants will yield over $314.6 billion in net benefits in the MISO region through 2055, and the benefits we discovered in this one region of the country were nearly 16 times larger than the benefits the agency expected for the entire country.
Conclusion
Americans will reap the significant economic and reliability benefits of the Trump administration’s proposal because it creates the essential regulatory certainty needed for the owners of the nation’s existing coal generators to continue operating these low-cost, reliable assets. It also removes impediments to the construction of new natural gas facilities, which are necessary to meet surging electricity demand from data centers and manufacturing.
We believe Dr. Bennet made convincing arguments that the use of co-benefits to justify rules is inappropriate; however, even after factoring in the impacts of additional emissions, these rules remain a major net positive for the country.
We hope our analysis will help the administration refine its methodology and shore up its rules from legal challenges.
I can't even fathom having arguments about miniscule; this is all political shyte and money laundering.
In 1975 I sat in St. Paul traffic in the winter asphyxiating myself on exhaust emissions as a kid and ten years later car(and mfg plant) emissions were down with cat convertors, etc. In 1996 I took an IC engines course in college and CO and NOx emissions from a car were barely 1%.
The point? Continuous improvement that we do - not completely insane unreality.
Great piece, team.
Nice article. In the 80’s I worked on installing a 50 Mw gate turbine at a sugar refinery in the north San Francisco Bay Area. It was the perfect co-generation application. The project was required to use best available control technology at the time. Most days the turbine exhaust was cleaner on the emissions we measured than the intake air, The state wasn’t impressed and gave the company a really tough time.