tv Key Capitol Hill Hearings CSPAN March 31, 2015 4:00pm-6:01pm EDT
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so in exchange for assurances from three countries, that is territorial -- is territorial sovereignty would be respected. those three kingdomswhat does it say not only to ukraine but countries around the world when those solemn assurances can be torn up and totally ignored question mark -- ignored? what does it say when we are trying to forgo koran from getting nuclear weapons in the future and it wonders about the enduring nature of those commitments into the future? there is a lot at stake in russia's actions in ukraine that we need to continue to stand up for. now, there are obviously costs to the pressure we are exerting on russia for its actions in ukraine, and these costs
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reverberate around the nation -- region. the nations around russia are feeling this also. we do not ask any country to choose ties with the u.s. to the exclusion of anyone else. we reject the false was is imposed by anyone else. we support the aspirations of central asian states to pursue a multi-vector foreign and economic policy. we know the threat of violent extremism is another danger for the region. this year the united states opened a summit to kickstart a conversation on the most effective weight to destroy isil and broader extremism. there were high-level delegations sent to the summit.
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the summit we held in washington not only considered the challenge of countering extremism, preventing it, reaching a large pool of alienated young men and women susceptible to the call of extremism by giving more economic and political opportunity. it is a challenge that requires us to take stock to make sure we're fostering societies in which citizens feel they have a stake. in this atmosphere of uncertainty, can be tempting to turn inward to build high walls two" borders. but the very geopolitics that give central asian states the cause for anxieties and cause them to embrace a different kind of future. our engagement pins on the choices that central asian states make today to seize the
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future and live up to the aspirations of their and citizens. in this journey, our commitment to them and to their citizens is as strong today as it was 23 years ago when the united states was among the very first recognize their independence. it is a commitment not only between governments, but between people, between our universities , between our businesses that create jobs, spur investment and developed markets. and between our leaders as they work together to advance the central reforms to overcome common challenges, to unlike the potential of central asia for this generation and generations to come. thank you very much.
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mr. talbott: tony, thank you for that terrific opening, and let me take the occasion to say all of us who have watched your stewardship of the bureau you were in charge of, which has got to be one of the more diverse portfolios in the state department extend our thanks and congratulations for the good work you have done. thank you for being here today. tony, that was a terrific overview. i hear a little bit of residence from history that we were saying goodbye to all those years ago. maybe at least one of the headlines could be welcome back, glflashman. so let's stay if we could for a
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moment on the last points you talked about, on the minds of all laws, the role of russia. and maybe you could zero in on kazakhstan and in particular not least because as you said the president and his government joined the ukrainians and the belarusians in getting rid of the nuclear weapons. they have a significant russian population. a point that president putin underscored in a meeting with the president of kazakhstan, and he took some outrage from that when president clinton questioned whether -- putin and whether kazakhstan was even a state. is that still resonating in the region, not just in kazakhstan but throughout the region? mr. blinken: it is resonating in the region and what is going on as we discussed a moment gone in ukraine is resonating.
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what is going on in georgia and continues to go on resonates in the region. moldova, all these things resonate. what is challenging is this -- first, we believe strongly that the countries of central asia should have peaceful, prosperous, beneficial relations with all their neighbors including russia, and russia is going to have a critical role to play in central asia. the trade relationship is important. remittances have been significant, and the downturn in the russian economy poses a real challenge for the many central patients who are there and we are sending money back home. as we try to make clear again and again we're not try to post some zero-sum choice, and when it comes to for example. russian economic union, the customs union, we're not telling countries that they should not join. it would be inconsistent with exactly what we have been
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telling the russians when it comes to ukraine, which is countries should be able to decide for themselves with whom they want to associate and what the basic decisions are about the future. so i think the challenge is that we want to encourage positive relations, but it is russia's actions themselves that are sending a discordant message to countries in the region, and that is causing them to look more and more for alternatives and different choices. i think maximizing those choices, neck more some as and those opportunities is a good thing. we hope to get to the point where russia changes its approach and provides the benefits that come with long and in many ways strong relations especially in that trade area. right now my sense is that the anxiety level is extremely high. mr. talbott: how does that translate into the attitude of the central asian state towards the prospects some as and those
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opportunities is a good thing. we hope to get to for a eurasian union, as an alternative to the european union? mr. blinken: we have been very clear. we have not said to anyone do not join, and indeed we have kazakhstan and tristan -- k yrgystan. what we do want to see when it comes that union is countries uphold their broader international commitments, and it does not have to to constrict trade, it advances it. if the result of joining such a union is more tariffs or nontariff barriers, that is moving in the wrong direction, backwards. there is nothing fundamentally inconsistent with doing that and participating in a larger international system. we are encouraging countries to
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do that. i think what a number of countries in the region are seeing right now is russia that has mismanaged its economy going back some time, second, the sanctions, as the result of the sanctions in ukraine that had given it a civic and sent back, and will prices, which perhaps more than anything else have undermined it. those things together make the benefits of engagement with russia economically a lot less than they were even a couple of years ago. again, that is causing countries to look to diversify their economic relationships. mr. talbott: you made a point of connecting american aspirations and concerns about political pluralism, and you also in that context flagged the danger of
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extremism and terrorism. there is a neighboring region, the caucasus where that is particularly a phenomenon that seems to be growing. i would say in parenthesis not least perhaps because of the russian policy of emphasizing ethnic russian nationalism which does not play very well in those parts of the russian federation or for that matter in the former soviet union, which are historically not slavic and indeed are at least culturally islamic in much of their legacy. do you hear and do your colleagues in the diplomatic posts in the region here much concern about the rise of islamic extremism in the
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caucasus bleeding over into other parts of the former soviet space? mr. blinken: yes, that is a concern. it is something we hear more and more. but it is not only the bleed over, it is the potential in a number of these countries for that kind of extremism to emerge within them. the question is and the challenges, how do you handle that? and here we face one of our very difficult dilemmas that we see in other parts of the world, because on the one hand we are working in the relative short term to help countries build their capacity to do with security challenges, including the potential challenges of extremism. and there we have been working great effectively, and the expertise we bring to the table is something that is very much sought by our partners. on the other hand, as i suggested a little while ago none of this in our judgment is sustainable.
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that is, real security and stability, are not sustainable absent more open and effect of governance, absent more and effective institutions, and absent the basic human right spirit a big part of the conversation with partners is on the one hand cupping them develop security capacity am including the deal with extremism, but making the case consistently with conviction that ultimately the path to sustainable stability has to go through more effective governance institutions, and democracy. mr. talbott: going back to the 1990's, back then there seemed to be some hope for the development of security ties between all of the former republics of the ussr. i'm thinking particularly a partnership for peace and the euro-asian partnership council. my sense, and correct me if i'm wrong, as those are pretty much
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-- can you imagine that there might be a resurgence of interest in that kind of security cooperation? mr. blinken: i would say certain aspects are alive and well, and including aspects of the partnership of peace, and we've seen engagement of partner countries in afghanistan has been extremely effective. some outside of them. if you look at the contributions of a country like georgia to what we have done in afghanistan, it is quite extraordinary on a per capita basis. truly amazing. my consensus that the big motivating factor right now is the potential for greater economic connectivity. and the potential there is extraordinary. but i also agree at least with what i think is the implication of your question that given the incredibly an increasingly uncertain environment, there may be more and more of a driver for
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these kind of security partnerships to take some greater life and energy, and that is something we are looking at. alternately, the more we are able to connect these countries, the more they are able to benefit from shared prosperity, the greater the foundation for stability people have going forward. mr. talbott: i will go to the audience are in a minute, so starting with johannes, so i wanted to ask about one other fairly major regional player, and it is china. would you say a little bit on that? and in so far as maybe not a great game, but a new game, is china a major player? mr. blinken: china is very much a major player, and we think this is largely koppelman treat what we are trying to do. indeed we are looking for ways to more effectively coordinate how the chinese, the investments they are making in the physical infrastructure that ultimately
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can connect to these countries are external and usually beneficial. beneficial to people in these countries in terms of giving them opportunity potentially beneficial to our own businesses that are trying to work there e, and there is no zero-sum choice here. these things can work together. our own engagement -- but i would say this, the engagement and investment are very important, but how they are done is also important. and so i think countries will ask russians about -- questions about the engagement and the investment, whose workers are being used to advance it, what kind of standards are being upheld when it comes to the rights workers, when it comes to the environment. what about the quality of the projects? all of these things are also critical. and i think they are in effect market forces that are jiving the chinese hopefully to -- are
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driving the chinese hopefully to raise that. the more we are able to work together in a complementary fashion to advance what we think will be in the interests of central asia, but also in our own interests and china's interests. there is no doubt they are big and growing bigger player. mr. talbott: would you say, this may sound like a leading question, but i know you will not be led, does the fear and concern in central asia about russia play to china's advantage, as it does perhaps to some degree to our own advantage? mr. blinken: the answer is yes but i think the incentive for most of the countries in the region is to look for various outlets, various points of contact. it is us, is russia because of a lot of history and strong trading relationships. is china because of its
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extraordinary investments. and depending on iran's view, as a gateway to europe, to india. if i am sitting in any of the capitals in central asia i'm looking at all of these possibilities. i personally think that the united states can bring to the table things that some of these other countries cannot, even if we are further away, we bring a certain way of doing business certain values, certain standards that i think are even more beneficial to people. but it is not a zero-sum choice. the more we can get other countries to raise their own game and raise their standards as they engage with central asia, better off the people in the region will be. mr. talbott: which brings to mind one other country, and then we will go to the hotness -- j ohannes. i remember the time when the ussr was disintegrating, making no secret of a turkish dream
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given their influences in the region we are talking about. how is turkey seen today particularly given some of the tumult that is going on there? mr. blinken: a good question and one that i am more comfortable asking of our partners in the region. i do not want to necessarily suggest how they are seeing turkey. i think you are right about turkey's interests and ambitions. it is also true that the turks have a german dismount on their hands in their immediate environments right now and that is challenging. the bottom line from my perspective again is this is not about creating false choices or imposing choices on our partners in central asia. one of the differences we bring to the table is a profound and strong belief that our partners have a right to make their decisions and make their own choices about the future. and if that involves us, so much the better. but if it involves other country
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in the region, that is their decision. mr. talbott: johannes? >> thank you for your presentation. it is a time initiative to take an interest in the strategy of the u.s. and the region to monopolies because as you go around the region you hear a lot of questions asked. how will we engage to shape the future. you talk eloquently about the interests. to me the question looking ahead, is, how will the engagement change? looking back and relative terms you think relative to the engagement of the u.s. elsewhere in the world and relative to the engagement of other major partners in the region, china and russia in particular. it is fair to say the engagement of yes and the region in the past has been relatively modest. so looking ahead how is the engagement going to change and how are you going to translate and leverage modest engagement
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relative to these other engagements into any effective -- an effective impact on the ground in terms of the objectives you of september which from my perspective are very valid? mr. blinken: it is an excellent question and i to give you things suggest themselves. one is as we all know 90% of lights are showing up. so the consistent and hopefully high-level engagement we have makes a difference, certainly on an official level. we have to do more than that. the assistant secretary has been a regular visitor and deeply engaged, as have a lot of officials across the board. it is something we are looking at over the next couple of years to elevate even that game. we have as you know and not a very regular structured dialogues on a whole host of issues that are going forward, and are really doing the day in
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and day out month and month out business of building these relationships. and then what is really important at least to me is that even as we have these critical government to government relations and as we do even better in building that engagement and being there that the other aspects of our connectivity and engagement are what really are going to sustain and build these relationships. the people to people aspect and especially the economic and trade aspect. and the more we are able to build connectivity i was talking about, the more we are able to engage people in both countries with each other the stronger that foundation is going to be. again, it may be a bias, but even though we have the disadvantage of being geographically far away, because we have interests, because we see potential and because we bring something to the table as ice just said that maybe some in close proximity neighbors do
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not, my sense is the central asian countries are very much looking to us for that engagement and we now just have to deliver on it. mr. talbott: thank you. the lady right here. please wait for them mike. >> talked about countering violent extremism and expertise americans bring. if you could talk about that that would be interesting. mr. blinken: let me say this, is not just the expertise that we bring. it is hopefully the expertise that many members of the international community bring. one of the most interesting aspects of the summit meeting we held about a month ago in washington was that we brought not only countries, not only governments, but also ngo's, technologists, academics the table from around the world. and what we found is different aspects of the problem have often been tackled somewhere someplace, by someone in a
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relatively effective way, and it is sharing that information and bringing it to scale that makes a big difference. for example, one of the big problems in terms of fostering radicalism and extremism is rather legalization -- radicalization of prisons. two of the charlie hebdo criminals had been in prison. some countries have developed very interesting programs to deal with it. it is sharing that knowledge and expertise that is critical, and that is one of the things that is a convening authority in a sense that we can bring to the table. and the fact that kazakhstan was a participant in the summit will hopefully make a difference to them. there is a long discussion what could have about what are the motivating factors that cause people to turn to extremism what do you do about that, and that was a lot what was discussed. but i think to me the other
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thing that stands out that we want to try to advance is that it is critical to counter the violent extremism that we confront today. sometimes that means when it comes to people who are beyond the reach of reason, using military and counterterrorism means to do it. at preventing it in the first place is obviously even cialre and there i come back to what i talked about earlierately countries have an obligation if they really want to prevent it to try to help more open societies come in because the more closed off you are more people cannot find out what's for their frustrations and their fears that are productive outlets. you can almost guarantee that they will find negative outlets for that and that under mines the stability you secret working in a part active way to help countries the book that is one of the most important things we can bring to the table. mr. blinken:mr. talbott: the lady
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there. >> thank you. i'm with hong kong phoenix tv. can you talk about the u.s. stance on one of the very important chinese initiatives to engage central asia, which is one gbell one road? if this complementary to the new silk road strategy, and also the deadline of the -- are you surprised to see 47 members join and are you embarrassed? thank you. mr. blinken: thank you for the questions except for the last couple of words. two things. to come back to the basic proposition. i strongly believe that many of the efforts that china is making including to its engagement and its civilian invest in our complementary with what we are kind to do and will be very beneficial to people in the
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region. but this first tie-in to the investor bank, our concern with the bank is this -- we are not opposed it. to the contrary, the more investment you can bring in infrastructure in the region come in asia, or broadly, we think the better. it is desperately needed. it is a foundation economic progress. but as oii's earlier, how happens is vitally important. the concerns we've had about the if you structure bank really go to its own standards, what are the governance rules of the bank what role does the board of directors play, what are the standards that ended vance in terms of worker rights and environmental protections intellectual property capital requirements, things like that. we've spent 70 years building international institutions to support financing and developing
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around the world, and in doing that we have tried throughout to raise the standards of these institutions in a way that benefits the people that they are working with. what we do not want to see happen is some kind of race to the bottom where the standards are diluted. that has been our only concern. so my sense is that -- and indeed, not just our concern even the countries that have decided to join have been very clear about their own concerns and indeed, i think one of the reasons that a number of countries has joined is the hope that they can help shape that governance and those standards. so if those standards are at the same level and made even greater than the standards that have already been s set in other institutions, that escaping great if not, the institution could undermine the goals of what they are seeking to achieve. mr. blinken: the prime minister
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of -- mr. talbott: the prime minister of sweden this morning made the same point. right here, and then will come to you, sir. >> i learned that central asia is similar to southeast asia, and thank you for a very comprehensive program you have put forth, including human rights and everything. i know that last week on the 19th you met with the vietnamese minister of the public security. and i would like to ask essentially, we are coming into the 20th year of the relationship and we have seen a lot of positive achievements between the two countries. but is there a lesson that we can learn and apply to central asia, and is there a negative lesson that we can also learn and apply and avoid?
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mr. blinken: thank you. i have to say one of the great success stories i think of recent years and has been the deeper and deeper relationship of the united states and vietnam. we are seeing that merge more and more in recent years in recent weeks, and indeed i had the opportunity to meet with several senior officials from vietnam. i hope and go there in the not-too-distant future. i think it is motivated by a number of things. first and foremost, i think it is motivated by an increasingly open view among the be amazed leadership what the best future is in terms of its own progress, terms of its own standards, and in terms of its own integration in the region.
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that has been very important and something we are pleased with. second, i have to tell you it is also motivated by some of china's actions in the region. we talked a little bit about russia before. we talked about the tremendously positive role china keen and indeed it is in many ways play, particularly through its investments in infrastructure industry. but there's also nervousness in the region as well over some of china's actions. that is causing countries to look to us as a potential foundation of stability. this digresses a little bit but still goes to the point. i was in china about two months ago. it was the first trip i took in this new job.
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we had a very interesting conversations, and one of the great things that has happened in recent years is that we are called really expanding our base of cooperation with china, and working together in more and more areas. just this last year, the leadership of the united states and china got together on climate change. the work that china did on ebola was very significant. even in our military and military relationships, we have been building confidence. but some of the actions that china takes in its own region are causing other countries to raise real questions. have real concerns. so some of the conversations that we had, one of the things that was suggested to our chinese partners and friends is that, even though our systems and countries are obviously very different, have. when histories from a very different stages of development, and some waste china today is like where the united states was
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after world war ii. we were emerging as a great power. we had to decide how to use that power. what they decided to do was to write rules, demo norms, and -- develop norms, and institutions that mistreat our power -- constrained our power. that is incentivized countries to get together to check our power. it has benefited greatly in the 16-70 years since. it is something that the chinese might find is a useful historical analogy. > excellent remarks. i like to come to the promotion of the democratic values issue. over the last two decades we
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have devoted series of programs for our ambassadors and of disease to use to promote civil society, democratic real actions, freedom is the expression -- freedom of expression. but now we are facing environments where these civil societies are being shut down. our leaders are arrested. are the tools and programs today adequate to address an environment that is far less friendly than it was two decades ago when we had this great hope for these programs? mr. blinken they are necessary, but not adequate. we constantly have to reevaluate whether there are more effective ways of advancing resolution for the reasons you state. my own sense is that we have to keep at it with even more determination. but we also have to commented more creatively, whether there
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are different, additional ways of engaging. how do we better use the media and new technology? how can we think about working with partner countries as they have more easy access than we do, but what to advance this vision -- but want to advance this mission? hopefully, the more we can build and strengthen the relationships, even with government and their confidence level increasing in us and the sustainability of our own engagement, we may create some ability to get them to think more broadly and aggressively -- progressively about the way they approach these issues. but it is also being clear and forthright, and holding people accountable for their actions. as you know we publish annual reports on human rights, on religious freedom, on trafficking and others.
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those are important documents, even if they do not get the attention here that we think. they get a lot of attention in the countries that they talk about. and of course, we have to hold ourselves to our own standards. otherwise, it rings a little bit hollow. the effort to build a more perfect union at home is never more coordinated than it is now. your question is very well-placed. we knewneed to do more, even as we push what we are already doing. mr. talbott: i know you have a long day ahead of you still. i hope all of you will join me in thanking tony for his kandahar. [applause] -- candor. [applause]
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>> a follow-up to some of the issues talked about here. the associated press reporting that nuclear talks between iran and six world powers will pass the negotiators will imposed tuesday night deadline to produce and outline, and be extended by at least a day. enough progress had been made to warrant an extension, although there will still be several difficult issues to bridge for secretary of state john kerry. he had planned to leave talks
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today, and will remain until wednesday. on the iran issue we will have live coverage tomorrow here on c-span of two events at the brookings. at 6:30 p.m. eastern tomorrow, we host several additional experts. live coverage of both of those events right here on c-span. like coverage coming up tonight from chicago with a new full showing chicago beer rahm emanuel -- with a new poll showing chicago mayor rahm emanuel with a large lead over jesus garcia. >> theis weekend
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learning about the literary life of tulsa, oklahoma. >> he was very much more than that. he was born in 1912, and so we're very proud to have his work back in oklahoma. he was an advocate for people who were disenfranchised, for those people who were migrant workers from oklahoma, kansas, and access during the dustbowl era. he found himself in california, literally starving. he saw this vast difference between those who were the half and the have-nots. he became their spokesman. when he recorded very few songs of his own. we have a listening station that features 46 of his songs in his own voice.
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that makes the recordings that he made some significant and important to us. ♪ this land is your land. this land is my land. from california, to the new york island. ♪ >> catch all of that on our cities tour. >> the supreme court this week heard three consolidated cases on epa regulations on mercury emission last week. the rules are a key part of the obama administration's environmental agenda and are set to go and affect -- go into effect next month. oral arguments are in our and-a-half.
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>> upa's view that they can do this without considering cost is in direct contradiction. it's interpretation -- >> i am not quite sure that that is what epa said my understanding is that it is necessary because of public health arms and it is appropriate because there are technologies that can address and remedy those public health harms. on the one hand it is said that
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appendix volume one. >> good lord. [laughter] >> page 196, this is the text of the final rule. page 206 a. it says we must find it appropriate to regulate the cleaner act existing 112. it proposes a hazard to public health environment. the phrase must regulate means that we get back the availability of control, there's nothing to be said.
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look at the availability of technologies? is that what you're saying echo that he thought the availability of technologies with assault and relevant to the termination? is that your argument? >> we're not saying they thought it was relevant. they thought it was something they did look at. it is something that when they did the utility study, they examined the availability of controls, but they said regardless of whether or not controls raw available, if a health hazard exists unaware to regulate.
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>> i thought they settle legal as necessary. congress is motivated in not listing the sources added to know whether the technology what -- that was going to be put into place to control acid rain would reduce the jps sufficiently so that regulation was a necessary or listing wasn't necessary. i had a different understanding of appropriate and necessary. appropriate if there were a jps but necessarily only those a gps were not sufficiently controlled by the other technology. >> both of them looked at whether or not there was going to be an ongoing harm because both necessary and appropriate turned on the utility study. the utility study was something that examined the health hazards would remain after all the other regulations -- >> the health hazard could have been low enough so that no standards were necessary. >> will be determined how severe the health hazard. the severity went into determining whether or not in
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public health hazard existed at all. so they look to the effects, and the only place they look to the severity in the final rules determining whether or not a public health hazard existed. once there were enough health effects that there was a public health hazard, then they said we must regulate. an attacker they said we must regulate, it is necessary to regulate, is exactly the same as what they said with appropriate, that we must regulate. >> and a step back for a minute? because this seems to me of this quest for a very particular meaning attached to each one of these additives. if we step back a little bit, i mean that kind of language is used all over the u.s. code, and indeed that kind of language is used in our constitution. and as i understand what courts have done with that kind of language is that the separate, define meetings for each of those words. it is just not right cousin is a complete phrase. >> i think there's two responses to that. first of all under the necessary and proper clause, if you look at what was dated primes versus
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the united states it recognize something might be necessarily and not -- necessary and not necessarily proper. the commentary of state legislature might be necessary to count which are trying to do -- >> exactly. we are separated out the two words and said something can be's necessary and not proper. and what marshall said was that necessary to meet absolutely indispensable. it just means he is full. that's quite different from saying that proper has no role to play. it can be necessary, that is useful to the federal government and not get proper. >> why do you get to pick what it means? i mean i thought in our agency role be repeatedly say that it determines the vagueness, and there's no legal definition of appropriate, it and actually yes. but by definition, if you're saying it is not self defined, you have to look at it in context. then it's ambiguous. >> i do not think it is ambiguous in context. you used the word appropriate in such a way that everyone understands what your meaning. if i said we're going to figure group of people and were going to go someplace and i would you behave in an appropriate manner, and i told you were going to the library, everyone would know what that means to be quite --
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quiet. >> yes paper look at the statue and is even doing the first part, the part at issue. and the very next provision says in four years instead of three, do a military study that includes costs. i'm looking at it. i can very safely say one study does it use the word costs. the other does. the first one does necessarily intend the cost to be looked at. what is irrational or not plausible about that reading? >> all we have to do is find implausible reading to uphold the interpretation. >> it's a rational because of taking the key statutory word and treating it as surplusage. the liquidation appointed you to earlier is on page four of our reply brief. by treating them as doing exactly the same work, they are reading a word out of the statute. and chevron deference doesn extent so pressed to say we can
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violate an ordinary rule of statutory construction, which is that independent words have -- >> the word appropriate, as it often is a signal that discretion is what's fitting, and you have expert agency. so the word appropriate, i think of it is commonly used to indicate the expert agency will do when it finds that based on its expertise. you are saying that appropriate necessarily embodies a cost calculation. this is a statute that uses instruction to consider costs. is there any case in all of our decisions where we have said even though there was no
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instruction to consider costs epa's required to consider costs? is there any such decision? >> no. i don't think this issue has risen the same way where congress has given broad discretion to an agency, told him to look at all of the circumstances, an agency is that we are going to ignore what is an important part of the problem. and that's why, in the way they chose cap and i'll look at it, this is a problem under chevron step 1, 2, or under the state farm., because agencies are supposed to not ignore an essential part of the problem as the engage in recent decision-making. >> bullet think -- but i think what justin ginsberg is getting at, is you know sometimes we have done -- we've looked at silence and we said that given
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that sounds, cost considerations are precluded. so that's an example and whitman. sometimes we sat silent still allows agency discretion. they can do what we want with it. but it so far from our most closely analogous case, which was witness -- whitman, to say not only is cost considerations not precluded, is required with their silence on the subject. now congress wanted require something, and clearly marked car this and other places, congress knows how to require consideration of costs, to get from silence to this notion of requirements you to be a pretty big jump in >> i don't think a silent when it tells the agency to look at all of the circumstances. and material circumstance in the context of the question that the agency has to answer is that we should regulate under this section, costs are part of the relevant materials -- >> i'm not even sure i agree with the premise that with congress is lovely cost, the agency is entitled to disregard cost. i think it is classic arbitrary and capricious agency action for an agency to an something that
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is our justly expensive, and which the expense leslie exceeds whatever public benefit can be achieved. i think that the violation of the administrative procedure act. even without the word appropriate. >> and that's where there's an overlap between what the study -- >> i'm sorry. the study at issue that the congress committed was simply a study. the administrator shall perform a study of the hazards to public health reasonably anticipated to occur as a result of omissions by electric utility steam generating unit. so the study that was directed to be made was only a public health hazard. and then it says, the administrator shall regulate these enters -- these entities after, under this section -- if it finds regulation is appropriate and is very after the results of that study. some of the studies directed
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only at public health hazards, a dozen talk at all about cost, just public health hazards, why is the world would one assume that congress was thinking about cost? why did it do as it did with mercury? make sure the study tell us how much control is going to be costs. but it did do that. it just said tellis if they are a public health hazard. >> and your entrée to limit the considerations that epa was supposed to look at in the study. it only said consider the study -- >> but it only says the study. it says the administrator shall regulate if the administrator finds that regulation is appropriate and necessary after considering the result of the study. after considering the results of
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the study. the only thing that the study requires is an evaluation of hazards to public health. -- >> i am not sure how you get to them having to do another step, when the only step that the requisite to registration is studying public health hazards. >> will force of all, even epa does something is limited solely to the things that were studied in that utility study. they rely on environmental harms to justify -- >> does that say after considering only the results of the study. >> know your honor. >> a dozen say that, does it? >> know your honor, that's correct. >> and they have to consider the result of the study. a dozen say they can't consider everything else. and the word appropriate seems to suggest that they may consider other stuff. >> so there's a study this was to look at but that's not the end of the analysis.
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the supposed to do something else. the second step is to figure out whether it's also appropriate and necessary to regulate. so i can stop at of the study. and again epa agrees they can look beyond result of the study. they look at environmental harms, which is not particularly mentioned here. >> it seems to me that a very salient feature of the statute that we have to interpret, maybe the most salient feature is that congress told -- chose to treat power plants differently from other sources. it could have treated the same way, and if it had not done that, then the listing decision would not have taken into account costs, it would have been based on commissions right? or a was an area source, it would have been based on effective help alone. so what, if anything can we for from that, the congress pointedly decided to treat power plays differently? >> i think we can tell that they are trying to create a different regime. they're trying to dissolving different here than they did elsewhere. >> but they were trying to create a regime, but the reason
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is pretty clear on its face. they were trying to create a regime because they thought that the acid rain program might have a real impact of what electric utilities were doing. so they said, wait and see let's see how the acid rain. that works let's see if we raised over problem to solve. and that's the reason why they put the electric utilities in a different category, isn't it? >> and that highlights why costs are for civic and -- are significant. the acid rain program, in particular, was an economically-based approach that was determined to regulate in a cost-effective manner. >> but the point is that the acid rain program did do what congress thought it might have done. it was still left with this issue of continuing harm from the electric utilities. and then once that happened it seems to me that is natural to take a look at the rest of the statute and to say let's regulate in a similar way to the way all other industries are being regulated. >> but it -- if they had wanted to do it in the same way, there would've been no need to use the phrase necessary and
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appropriate. they could have justly gone to the 1010 threshold emissions that apply to major sources and to risk based analysis that goes to area sources. so the fact that they use different criteria here as most of the criteria -- >> hurriedly cut half but they might've thought let's take a look at the acid rated program. let's take a look at the problem that still remains, if any, and give discretion to the agency at that point. it will be years down the road in a different set of circumstances. >> but the discretion includes looking at the entire problem. i can from the language and circumstances requires looking at the material circumstances. and this ties in to the state farm test radio to look at all the relevant circumstances if you're engaged in reasonable direction. you cannot ignore an import part of the problem. >> if the reason for the separate treatment was the belief that the acid rain program would be sufficient at some point time to bring
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omissions from power plays below the level that would result in their being listed if they were other sources, why would a venus every two and a separate provision asking whether it's necessary and appropriate to regulate them? it could have just -- >> i don't see how that can be the explanation. >> they could have just had a three-year delay if that's all they were trying to do, as opposed to -- and then go through their ordinary system. >> no, because it isn't no. they thought it might, they thought it might not. they were going to wait and see. a defendant how how the industry responded to the regulatory requirements of the acid rain program. >> that still does not explain why they chose to use different criteria as opposed to just reiterating the criteria that are under the ordinary think that applies to every other source. they are still trying to treat electric utilities differently. i would like to return to one point about yes rate program which is that if you're addressing emissions from electric utilities in a program is specifically targeting electric utilities as they did in the acid rain program and that was entirely based on cost of business -- cost effective
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thness, it makes little sense to look at what's remaining after you party tonight and into saint's area of diminishing marginal utility, were going to say cost are relevant. that's backwards. costs would be especially relevant when you're in the area of what's left over. >> when the statute refers to the emissions standards for the 12% of the best performing plants the government say that able to leave across consideration? >> i spec will. the way of asian that is to say that looks at the planes across the range of how old they are. so placed that were built in 2005, for example, have been a built in such a way that they are technology where was cost-effective to include certain control measures. what you're looking at plants that were built in 1960's imposing the same control measures on an older plant is something new. it will be a lot more expensive. it's the difference between renovating her house and building a certainly in the first place >> if that's a
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mandated database from which the government must operate in it seems to me like there's an implicit cost consideration there. he still same methods of vision that he still say that is insufficient because? >> that insufficient general lindstrom: the fact that some utilities were able to impose things doesn't mean it would be cost effective for other want to do it. justice breyer: suppose that what he 5% of all electricity generators are near waterfalls. this is easy for them, ok? but 75%, it is impossible and they will out of business and we will have no electricity. could the epa, under their current theory, take account of
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that? the answer i want to say is no but they say yes, they can. earlier in the statute, it says "the administrator may just in which among the classes, types and sizes of resources.' so if you really had the situation, you could say 75% of generators in the less -- generators in the united states are old technology and he will go out of business. don't they have that position in the 12% and the next one the ability to take into account at least series cost problems? general lindstrom: assuming they have the ability to take into account? justice breyer: yes or no? no, why not? general lindstrom: the reason is that costs are not directly
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relevant is to the first one is what i was expecting about a 12%. in other words, the example you gave it shows that some might be able to have the lower cost effective approach just because they are not near a waterfall. justice breyer: into the imaginary situation i have imagined, 20% of the generators for whatever reason, can meet this pretty easily. the next 80% will require the entire gross national product to meet it. supposing that were the situation. you could supposedly go to the epa nsa, create a second class, a separate type. four that is the reason it is so expensive. and therefore, the 12% does not apply to them because they are in a separate class. my question is -- can you legally make that argument? and will they take it into account? edit that is what i want a yes
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or no answer to. general lindstrom: the answer might be yes in the future, but now we can't do it because -- justice breyer: why are you make the argument here now? general lindstrom: i don't believe either side has made that argument. justice scalia: has the agency made this obvious art meant? has the agency said we're going to take costs into account? general lindstrom: they did not. justice scalia: i don't think so. i never heard of this argument. i want to know a fact. did anyone on your side of the issue asked the agency to take costs into account brutally, roughly, crudely, or did they all say we want it cost-benefit analysis?
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i would like your characterization of the record on that point. because reading what they have said, it is about cost-benefit analysis, . so that a media idea that maybe everyone interested in cost asked for a cost-benefit analysis. general lindstrom: i think the answer is that we asked them to consider costs. we thought it cost-benefit analysis is the ordinary way that a recent agency decision-making happened, not through some vague sense of what the costs are, by doing an analysis. their position is that we don't need to do that because costs are irrelevant. that is not something we have to consider under these. justice sotomayor: as i understand what happens listings and standards are the only things that you can generally appeal from. it is a on the final agency action when the standards are issued.
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and i thought it was at the issuance of the standards that the government sometimes break up the sources and the amount of emissions that each type of source that justice breyer is talking about can have. i think the listing is just of erotic category -- of broad category. we have had plenty of cases where we have looked at the agency saying this type of source meet these standards, that type of source meet another standard. isn't that the way it works? general lindstrom: that highlights whether or not treating this as a separate listing versus regulatory decision. they did both at the exact same time here. they also promulgated the emissions standards. justice scalia: once they are listed, they are subject to minimum standards, aren't they? general lindstrom: that is correct. justice scalia: minimum standards apply, right?
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the agency could have discretion as to whether to lift the standards further, but the minimums apply right? general lindstrom: that is the epa position. if i could reserve time for my rebuttal. justice roberts: thank you. mr. brownell: mr. chief justice i would like to make three points to support my colleagues or commit. to begin, power plants are the most recommended source category under the clean act both before 1990 and after the 1990 amendment. it's not only title for acid the positive -- acid deposition program, but a visibility, best available retrofit technology, pollution transport grants
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targeted at power plants, and a variety of control programs, both quality and air quality. justice kagan: i would think that cuts the other way that every other significant industry in the u.s. is subject to this program except or electric power plants. -- except for electric power plants. mr., brownell: what it shows is that for other industries epa instigated in 2010 that for all other industries, the air toxics program that would impose compliance costs of about $840 million. the single regulation now on air toxics imposes annual cost of $9.6 billion. and what does one get for it? it think it is important to understand some of the questions that have been asked. there is a regulation for mercury, i regulation for non-mercury metals, and a regulation for acid gases.
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most of the cost associated with the acid gas relation which the agency has concluded present no public health risk. the agency said that our modeling has consistently shown that power plant related exposures are at least an order of magnitude below the conservative tillie determined safe level. -- conservatively determined safe level. congress addressed pollution with the acid of vacation potential and required reductions of 9 million tons a year at about cost of $1.4 billion. the acid gas program is projected to result in the reductions of acid gases about 500,000 tons per year at the cost of the $500 billion. -- $5 billion. what that back rent shows is that why congress treated powerplants differently. it asked whether it is appropriate to impose further
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revelation of a specific type, whether it's appropriate to propose regular under this section on the most aggressively related industry under the clean air act. justice kagan: can i take you back to justice breyer's first question? it was about how these categories work and how the categories enable the epa to mitigate certain dramatic or onerous costs of certain segments of the industry. but that is not an unknown provision of any kind. and indeed it seems to me that the provision very much cuts against your ultimate. epa, in some ways, can't even figure out the cost until it makes those categories asian to decisions. put the aggregate costs, not just within each category, but the aggregate costs obviously depend on how epa categorizes and sub categorizes. you would have the epa make the cost consolation before it really can, even the structure of the statute.
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mr. brownell: your honor the cost doesn't factor into a variety of determinations that are made as part of the regulatory process. when epa issued it notice of regulatory finding in december of 2010, it said that this is not final. epa confirmed again, this is on page 555a of uar petitioner's appendix, that there is no final (n1)(a) determination or listing, and we are going to take, it on that as part of the rulemaking to examine section 7412(d) emissions standards. as part of that, the agency addresses issues related to level of control, sub categorization and at the end of the rulemaking comes out with a relation that has certain characteristics and consequences .
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and here this regulation addresses whether such relation under the section is appropriate and necessary for pump -- necessary for powerplants. it may be necessary to regulate something like arcuri if there's a public health risk, and that's the only hazardous air pollutant for which epa has alkylated a quantifiable public health risk but that may not be the appropriate regulatory regime if as epa has explained here, their view on the statute is not to focus on whether such regulation is appropriate whether listing of power plants is under subsection c is appropriate just like every other source. justice scalia: can i ask whether that listing are subject or to the categorization device that justice breyer was asking about?
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could the agency saying, we're going to divide these categories, since 80% of plants don't have waterfalls nearby, we're going to exempt them from these minimum standards? mr. brownell: no, your honor, not at a listing stage. justice kagan: the minimums depend on the categories and the subcategories. you can categorize in such a way that the minimums will be up here, or you can categorize in such a way that the minimums will be down there. mr. brownell: and it during the rulemaking, arguments made about that sub categorization and epa ultimately sent cut revised the power industry with respect to want limited set of sources. otherwise, epa's position is once listed, it triggers an obligation to issue emissions standards under the -- justice kagan: it triggers an
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obligation as to some standard but again the minimum standard can vary dramatically depending on how the categories and subcategories are set up. so it you are having the epa consider cost you for the epa can know what costs are. mr. brownell: epa doesn't know what the costs are during the rulemaking process in which it undertakes notice and comment with respect to both the n1a determination and emissions standards. the clean air act lists subsection n as one of the provisions that requires notice and comment will making under the special clean air act procedures. this is why the agency explained that there is no final n1a until the end of the process, until notice and comment and we've taken and determine what the costs are. justice sotomayor: confirming what justice breyer said, the
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point that you had an opportunity and apparently took advantage of it, to tell epa that it should sub categorized this source. and it decided to sub categorized just one piece of it. so what you are really saying to us is it is not the listing it is the way they set up their emissions standards that i disagree with. because they could have decided that there were subcategories that didn't require a standard at all. i am presuming that they could have said anybody by water doesn't have to do more because they're already told percent -- they are already part of the 12%. we are going to do cost by everybody else that is not my daughter. mr. brownell: conceptually, i imagine they could have sub categorized away the entire
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industry, but that is not what they did in this rulemaking. justice sotomayor: no, they didn't do it. but you are asking us -- this is a challenge to a regulation that is only piecemeal. because you are arguing that they should have considered costs, but they obviously did before they issued the standards. you can't look at the standards and the admission to the case and the listing in a case like this in isolation. mr. brownell: justice sotomayor if i could try to answer the question once again. the subsection n1a question is whether after considering the results of the study -- and i note that the study also looks at alternative control strategies for any emissions that may want regulation -- the agency determines such regulation is appropriate and necessary. the focus of the determination
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is not on listing what may flow from that, what regulation and that the agency decides to apply . justice alito: did epa say we are not going to take cost and to account at the listing stage because we will take costs into account through this subcategories in possibility that is being discussed? mr. brownell: no, your honor. as i recall of the record of the proceeding, this discussion of its has come up in the briefing afterwards. justice brewer: why didn't they write -- these questions are difficult because they are so hypothetical. it isn't true that 50% of the industry will use up all of the domestic product, etc.. but they wrote this thing in a way that sounds as if even if
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they had been true, that wouldn't have been taking into account. but with the sg is telling us is don't worry. maybe they should have written knowing what we know and what is undisputed so far, what we don't the cost problem is enough for us to warrant a cost-benefit analysis or other consideration. now, they didn't write that. it is really the sg, but i mean, is there really a different way that they could eliminate this horrible scenario if it existed which it didn't. you understand what i am driving at? trying to get your best answer on that. mr. brownell: i want to emphasize whether this is an argument whether or not to regulate mercury, it is whether
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or not the regulatory regime that has been defined here under section 7412, which the government says is the listing that applies to all other source categories, and the minimum control technology standards that apply to all other source categories is the right way to do it. regardless of how you sub categorized, it will have a tremendous impacts as a result of acid gas relation and for a polluted that present no public health risk. chief roberts: we can't uphold an agency rule on a grounder that they didn't adopt below correct? so your understanding correct that this is not a basis for decision that they adopted below? mr. brownell: my understanding of the basis for the decision below is that costs are irrelevant--
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justice kagan: but that is exactly right, mr. brownell. the agency at that point in time was only answering the very first question, the very threshold issue. at that point, the agency said cost were irrelevant. but cost become irrelevant leader in the analysis and in a variety of ways. through the 12 and a half percent, through the 12% through the categorization of sub categorization, through the determination whether to raise standards even higher. so costs costs later, but as to this reticular thing, the agency said yes here we don't consider costs. we could, what we don't want to because there is all this potential for cost to come in afterwards. mr. brownell: and your honor, it's costs cost costs under the statutory criteria that congress
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provided for setting control technology standards and then having to find their standards at the end of the process. the agency finalizes its determination in light of the costs and impacts and other factors entered in the -- justice kennedy: do you think whenever the term "appropriate" is used in the clean air act that it demands a cost-benefit analysis? mr. brownell: your honor, when you say in any context, that is so broad that i don't think i can say whether it require cost-benefit in any context. but in a specific context where focus is on whether such regulation is appropriate and necessary, that regulation has certain character a and consequences that we talked about this morning, including the fact that it imposes on a polluted that present health risk, $5 billion a year. justice ginsberg: before your time is up, can you clarify for
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me why i did stage this is something that we should be concerned about, because there is this regulatory impact assessment -- that has said that the benefits vastly exceed the costs, and that impact analysis has gone through the or process and or concluded that epa appropriately cuckolded costs. -- appropriately calculated the cost. mr. brownell: the co-benefits all of those benefits are coping of its. only $4 million to $6 million are associated with hazardous air pollutants. those benefits that are in the regulatory impact analysis were not considered as part of the regulatory determination for good reason, because i are important questions regarding their legal importance and relevance under the proper standard. what i mean is that pm 2.5 is
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the pollutant, fine particles that is associated with these co-benefits. that is extensively regulated under the national ambient air quality standard. in fact, those are: the standards were only recently revised to be tightened, and in the context of that proceeding, the agency found that the low levels of exposure for these co-benefits did not produce effects or risks that were of regulatory significance because they were too uncertain. justice roberts: thank you counsel. general verrilli: may it please the court, epa's interpretation of 7412 should be affirmed for three basic reasons. it is the most natural and certainly a permissible reading of the statutory text which drugs epa to focus on health
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concerns and doesn't mention costs. it harmonizes the provision with section 7412's structure and design, because it applies the same regulatory logic to power plants that congress directed epa to apply to regulate hazardous air pollution from every other type of source. as a matter of common sense and sound government practice, it was certainly appropriate for epa to list powerpoint regulation based solely on health and environmental hazards, because that reflects the approach congress not only chose in 7412, but in all of the major regulatory programs under the clean air act. justice roberts: you concede don't you, that epa could have interpreted the statutory language to allow them to consider costs? general verrilli: i think epa rated as the best interpretation of the statute was that it
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didn't provide for the consideration of cost at the listing stage -- justice roberts: but under chevron, if you are adopted a regulation of that said appropriate and necessary allows us to consider costs, do you think that would be appropriate? general verrilli: i think the phrase appropriate and necessary doesn't preclude the epa from considering cost. justice roberts: but since you are dealing with the term, i think this says capacious as appropriate, and since you could have issued a regulation allowing the consideration of costs as appropriate, you're saying is that the agency deliberately tied its hands and said we are not going to consider something. general verrilli: what the agency did was decided it was weather appropriate to approach the question of whether to regular power plants in the same manner that commerce found it was not only appropriate, mandated to answer the question. justice roberts: i understand
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the question that they could have done that, what it is unusual for an agency to say when they do some thing, that that is the only thing we could do agencies usually like to get as much discretion as they can. to say that they were prohibited from considering cost under the phrase " appropriate" strikes me as unusual. general verrilli: it says we not consider costs of the listing stage -- justice kennedy: could this
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agency reasonably have considered cost? general verrilli: i don't think the statutory text for bids than from considering costs. the epa determined that powerplants are no differently situated than any other source of hazardous air pollutants regulated under section 7412. and if i may, for every other source of hazardous air pollutants, what congress mandated as appropriate wasn't that you do not consider costs when you decide whether to regular. you only consider health and environmental effects, and then you do consider costs under section 7412d when you set emissions standards. justice alito: how is that consistent with this statutory scheme? if your argument is that epa
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only reason for doing this is that it wants to treat powerplants same as other sources, we know that is what congress didn't want or it would have -- it would not have enacted the separate provision for powerplants. general verrilli: i agree justice alito, that congress proposed different treatment for powerplants, but that doesn't answer the question. that's just asks question. what petitioners are arguing is what congress prescribed and mandated was a cost-benefit analysis that does not apply to any other source of hazardous pollutant, but that is not what the text of the statute says. what it says is that for every other source, regulation would proceed immediately, but for powerplants, there was uncertainly -- there was uncertainty about whether powerplants in hazardous pollutants at a level that would cause a problem, and whether there were alternative control strategies available. what congress told epa to do was studied those three things. those go to health
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considerations. once epa made a judgment about that, it was to decide whether to list powerplants or regulation, whether it was appropriate to list them for revelation -- four regulation. justice alito: this is what i understand about your position. -- don't understand about your position. congress's decision to treat powerplants differently reflects the fact that congress wanted at least to hold open the possibility that powerplants not be listed even if their emissions exceeded the levels that will result in listing for other sources. i don't see why they would treat them any differently. if i can just continue. perhaps you may disagree, but that's just necessary inference from this statutory scheme. if that is the case, what factors might congress have thought it justify allowing powerplants to emit more than would he permitted if they were other sources?
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petitioners have a nation's costs, in particularly the title iv program. their admissions might exceed the otherwise permissible limit because they have participated in the cap and trade program, so they have contributed to the reduction in emissions in that way, in a way that would be full cited in their own emissions. that is an excavation -- an excavation. i don't know what your explanation is. general verrilli: i know you're asking me to accept the premise, but i cannot because both the text of n1a and the legislative history tell you what considerations congas left open. the argument that your honor just post is not in the legislative history, and it is not in the text. congress really hot that, then what they would have said to epa
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is to push the pause button, take three years and study. they would have expertly told epa to study cost, and they did not do that. justice alito: if they all were concerned about health, why wouldn't they impose powerplants the same standard that is imposed on area sources? justice alito: i think they came very close to that. until the epa to make its judgment after considering results of the ready. a tall dentist anything that went to health hazards. the reason they used appropriate and necessary language is because congress, when it was legislating, and instead there might well be uncertainty at the end of this analysis that congress directed the epa to undertake. there might be uncertainty about the effects of acid rain.
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justice sotomayor: i think that is what the legislature said. donald verrilli: the way that acid rain regulations unfolded they were at the same time as 7412. but they unfolded over a 10 year. -- period. epa had to make a long-term projection. when i think with congress with saying, you may need to exercise judgment here. and epa did exercise judgment. justice breyer: there are two parts to this. the argument very much depends on -- don't worry because there is a way to take into event account cost. it is a lot of money, $9 billion. if you divided it, you have $30
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per person. that is a lot of money for people. for some people. it begins to look a little irrational to say i'm not taking into account at all. they will take into account when they set standards. at that point, i read the thing about 12%. they can refer me back to the categorization of two things earlier. and then i have aside from that, there is what you do. you look at the top 12 generators and that is the minimum standard. so they might want to say that's not right. i mean, it's right, it says it, but if you go to the bottom 50
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generators, you will see it will not cost $120. it will cost $1000 per family. we had the epa saying, we won't even look at that. at that point, i think they would say, why? why would you even look at it? the answer seems to be in the source. maybe the epa could say, don't worry if there is such an argument. which there isn't. we have the power under the statute to take into account. you know where the argument came from? discussion and thought in my chambers. maybe it came out of the reefs to -- briefs, too. can the epa take that into account, or do they have to find lycee that the top 12 counts for everybody no matter what the
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cost? that is the argument. donald verrilli: i'm going to make three points in response. the first goes to the empirical situation. the first is this. 9 billion is a big number. this is an industry with 300 and 60 billion -- two and a half percent annual revenues. what congress and epa concluded -- justice sotomayor: this isn't about profit though. donald verrilli: right, but 2% could go off-line as a result of it being economics. but it is not 50% or 70.
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now let me talk about the way epa under this regime does take cost into account. the situation that your honor described in hypotheticals is a quite unusual one. in a normal case, the 12% rule it's that kind of april. and in the normal case, it is not going to have that effect. it means that this percentage of the industry has been able to meet this without an operator in an economic matter and congress is trying to force the rest of the industry to catch up. as we know from multiple experiences, as your honor identified, with respect to catalytic converters and motor vehicles and with respect to acid rain, it turned out that the cost would be vastly lower on industry then epa anticipated. the third point is your honor's point about subcategories. section 7412 c one, the
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provision that governs the listing of categories, it mentions the availability of subcategories. the last sentence says -- 30 5 a.m. the appendix to our brief. justice kennedy: thank you. donald verrilli: it says nothing in the preceding sentence limits the administrators authority to establish subcategories under this section is appropriate. that is how it would work because you identified the category. justice scalia: i thought the standards are automatic. there's certain minimums. once they find on the basis of the study that these should be listed i thought there was an automatic requirement imposed on
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-- which is the reason they are complaining. donald verrilli: the requirement depends on how you categorize. if there were a situation in which, one segment of the industry was so vastly different from another segment, in terms of technology then epa would have the authority to break those into two separate subcategories and then you don't calculate the best performing 12%, the standard. until you know it is the best performing 12% of the people. justice breyer: the language does that. the language does that is the first sentence of three. the maximum degree that is deemed achievable. that is achieved in practice by the best controlled similar source as determined by the administrator. that is what allows him to break into categories. am i right?
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donald verrilli: that's correct. justice breyer: -- where can you point me in the record where this was made by the agency? it is a very important principle of administrative law that we will only uphold the rule based on arguments that were considered by the agency. it is not something i recall. donald verrilli: you are exactly right in stating in principle our argument in this case is that this question here is under and one a -- n1a, says that epa shall regulate under this section if he determine that such regulation is appropriate
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and necessary. therefore when ep makes a judgment to regulate under this, it is appropriate and necessary. justice scalia: well you're just seeing the argument is right. the agency must have arrested its decision. donald verrilli: i think that the agency in the order of being challenged here did use the approach. but beyond that it would be one thing if this were a case in which you had a situation that epa faced a situation where 50% or 75% were going to raise -- face vastly economic consequences. justice sotomayor: can i simplify your answer? [laughter] basically you have consistently in your brief, and the other respondents, basically said at
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the listing stage, we don't consider cost. we consider it later. everybody gave a few examples. whether this was given or not is irrelevant. a few here was, do you have to do it at listing? it is only some of my colleagues who are concerned that when you issue standards, you never consider the cost. donald verrilli: that's exactly right. the question here is whether epa has to conduct a cost benefit analysis when it goes to listing. justice kennedy: but at that point the game is over. donald verrilli: i don't think it is for several reasons. first, the standard under section 7412 d, for setting emissions standards that does
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take off into account in the sense that a segment of the industry can operate economically. justice scalia: i don't -- i did not understand. i thought there were automatic requirements was the -- donald verrilli: once epa lists and defines a category, the automatic requirement is that applied is that everyone in the category has to match the performance of the best 12%. justice scalia: where did the categories come from -- i don't like that your friend on the other side was not permitted to mount an argument in opposition to this categorization theory that justice breyer's chambers devised. usually we have arguments on both sides. this is an argument i never heard of. i'm not sure it is right.
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i didn't know the agency to say we are just listing but we are going to categorize the listing. they didn't say that. donald verrilli: i understand your point about the focus or not focus of subcategories. but the point that we are just listing, we see that over and over again. and in fact, the petitioners concede, this is at page five and six of the uart reply brief. it is just about listing. that is the way the statute works. chief roberts: you have responded to the fairly dramatic disparity your friends on the other side say, 6 million benefits, 9.6 million cost. you respond with a different calculation. the argument is raised that it is not quite proper because you are using your agp regulation to get at the criteria pollutants
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that he otherwise would have to go to and much more difficult process. in other words, you can't regulate the criteria pollutants through the hap program, so were going to regulate and that is how we get the additional regulation. so it is an end run around the restrictions that would otherwise make -- give you less control. donald verrilli: there are several points i need to make clear. the first is that that is not an argument that any party has we -- reasons. one amicus reef raised it. justice roberts: well my chambers found it. [laughter] donald verrilli: here is the problem with the argument. once epa concludes that a source admits hazardous pollutants
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that they inmate mercury at levels that are unsafe, i don't think petitioners dispute that. by the unambiguous terms of section 7412 d, epa is under an obligation to regulate all hazardous pollutants that a source admits. that is in a case called national line -- chief justice roberts: i understand. i'm just questioning the legitimacy of it. you found one that you want to list, but you ought to consider only the benefits of regulating that. not be bootstrapped benefits. donald verrilli: the next point i would make is that it is not an end run or bootstrap. this is regulating the surrogates, it is a well recognized methodology that goes
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back decades. that epa has used for decades and the d.c. circuit has upheld for decades. that is an appropriate way to deal with getting on metals and other pollutants that would be hard to get at directly. the very argument that your partner is positing here as an end run is one that was made in the same national line case to the d.c. circuit 15 years ago and the d.c. circuit rejected. the epa is doing -- they said that the section required them to do with respect to regulating every hazardous pollutant, and what the circuit that for decades, is permitted to do and it isn't an end run at all. chief justice roberts: the issue that raises a red flag is that such a tiny proportion of an event from the program and such a disproportionate amount of benefit that would normally be
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addressed under the criteria. it's not just that you are regulating one if it's a good thing, it also has benefits with respect other pollutants. but if your basis -- what is the benefit from the co-pollutants? donald verrilli: many billions. roberts: what for million? so you say we get to regulate this. but we get to regulate it there is $4 million impact. but when we do that, it -- in a way that gives us $35 billion. i understand the idea that, it is a good thing if your regularization -- regulation on benefits in other ways. donald verrilli: i don't think that. i understand the petition is put the case that way. i don't think that is a fair way to put it. when epa did was quantify one of
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the public health benefits. it did not quantify many of the other health it. if you look in the joint appendix, this is 910 to 940. epa has listed other benefits that come from regulating mercury and hazardous substances that it did not try to quantify. quantifying those kinds of benefits can be very difficult and challenging. that is one of the key reasons congress adopted 7412 but other programs they were not taking costs into consideration at the listing stage but only at the regulatory state. justice sotomayor: could you tell me about the natural gas iago --? donald verrilli: it did not
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reach public health levels that would make them comparable to the coal. sotomayor: they were part of the listing but not regulated. donald verrilli: yes your honor. justice alito: your argument is that under the last sentence of 7412 c one, the epa can create subcategories based in whole or part, on costs. is that right? donald verrilli: i think it is more subtle. it is not just that provision. numerous provisions. that allow for sub categorization. if there is such a vast difference in the technologies that the group of entities is using, there would be that vast difference in cost, there might be a basis to treat them as a different subcategory. justice scalia: why didn't the
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epa say that? i thought they said we are not going to take into account costs with regard to listing. they could have said, we're going to take into account costs as to whether subcategories should be listed and others should not be. that is not what they said. they said we will not take into account costs with regard to listing. we list all of these utilities. donald verrilli: here is what they said. what they said was we think it is appropriate with respect to power plants, not to consider costs at listing and to consider costs at emissions standards settings. the reason we think it is appropriate is because that is the standard and regulatory logic that congress deems appropriate and also mandatory for every other source category. one would have to conclude that what congress said was mandatory
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and therefore necessarily appropriate for every other category, was inappropriate and -- scalia: i did not understand it to say we can exempt some people from these standards because we categorize them differently. donald verrilli: that is fair -- they are argument, but the point of the logic of the epa's position is you make the listing decision and then you regulate under section 7412. these are provisions in section 7412 that gives epa the authority. justice alito: are there regulations that set out the categories #--? that without them we don't know. donald verrilli: i do think --
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it is going to be based on differences in technology and operation from which you might be able to infer costs. but that is hypothetical because this is not a case in which epa needed to confront the question except with respect to natural gas fired power plants. because it did not have a kind of problem that justice breyer's hypothetical raised. you didn't had that can of problem. you did not need to face this issue in these cases. if i could just make this point it is quite critical. given that 70 4/12 regulatory logic provides for listing based on health, and mission standard-setting based on costs including consideration of costs. and paste on -- given that is exactly the same logic under one program and the motor vehicle program, the same under the new source performance standards
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program, that it -- if congress intended to mandate that the epa cut so deeply against the grain and such a radically different approach with this one category, you would expect to see very clear legislative language to that effect. you would expect to see a direction to epa and 7412 to study costs before making a judgment. justice scalia: a question about costs. there are other costs besides economic costs. is it the agency's position that no cost can be taken into account? it may find that a particular material has an effect on health, but it may find that eliminating it will have other effects that are even more deleterious to health. could that be taken into account? donald verrilli: if i may
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answer, i think that will be taken into account in the oira regulatory, but not for the listing. chief justice roberts: thank you, general. mr. smith: mr. chief justice, and may please the court. we agree with the government that the epa was not required to engage in a cost benefit analysis before making the initial listing to regulate hazardous pollutants emitted by power plants applying the appropriate and necessary standard. i want to knowledge, clearly congress did think that they needed to be treated differently. but they gave them a three-year pause in which the epa was instructed to take account of the health effects of that
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particular pollutants emitted by our plans. he did this under an appropriate and necessary standard. if i can address the issue of what that means. i refer to page 226 of the national mining association appendix. what the epa said consistently throughout this record is we look at two things. there was a claim made in the legislative history that these chemical not simply not harmful enough to require any further regulation, that there affects are negligible, and they looked at that under the appropriateness rubric. they said these are harmful particularly mercury. they also looked at the question of whether or not there were technologies available to regulate them. the necessary rubric was used to look at the post clean air act post acid rain health effects that would persist. they said these are harmful chemicals, and under necessary they will continue to be harmful
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after the acid rain program has kicked in. that is how the epa saw the two different words. justice scalia: who would've guessed? that seems such an artificial division of necessary and approve. i didn't quite understand it. mr. smith: everybody concedes the necessary means that there will still be health problems after the program kicks in. the appropriate was intended to meet the claim made by the industry that these chemicals already are sufficiently carved free and we don't need to regulate them. scalia: why isn't that part of the first one #so escalated -- mr. smith. --: that's the way the government read them.
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they keeping his is the issues they were directed to study, the issues that were supposed to control the listing decision that come out of the power plants. if i can clarify one thing that happened at the listing stage. natural gas fire plans were not turned into a category. they looked at the health effects of national -- natural gas fire plans, seeing we are exempting them from regulation under this section because they simply don't inmate more -- emit more than trace amounts. natural gas plants get taken out at the listing stage. we then have coal-fired and oil fired plants that they applied the subsection e standards. standards which were designed by congress to limit the emission regulations to read -- reasonable amounts designed because the floors are in fact,
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limited to what has already been achieved high plans in the same category. there was some question raised about whether or not this categorization was something the epa recognized incudes to affect the emissions standards and make them reasonable. in fact they did use -- created a category of coal burning plants that burn lignite because it turns out none of those lands could meet the standards that would otherwise have applied with the other coal-fired plants categories. and they looked at the whole process. they started out with two coal-fired categories. and it up with one oil fired category. in the final rule, there are four separate categories. of oil fired plants, depending on what they burn. this whole process to produce emissions standards that makes sense was built into subsection d --
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justice kagan: could you clarify the categorization happens after the listing? mr. smith: yes, your honor. what they listed was all coal fired plants and all oil fired plants, but no natural gas plants. then they go to the question of what admissions standards could occur. they have a process of seeing what are the categories going to be. we have to get information at that point. what did the top 12% of the category are admissions -- emissions. justice scalia: aren't these above the minimums that automatically applied? the categorization that allows you to reduce some people, and not reduce others, that applies to requirements about the minimums no?
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mr. smith: the minimums i do things that are set by mathematical calculations from the categories. justice scalia: yes. mr. smith: the only thing that is done using not express consideration of cost, but indirectly basing the regulations and what the top 12% are doing, is the minimums. the minimums i been altered depending on what categories you establish. that is the way they do for all the sources regulated. justice kagan: just to clarify. you categories one way, the minimums are down here, you categorize another, the minimums are up there. it can make a huge difference in terms of minimums. mr. smith: right. there is a notice and comment process. they put out proposed categories. they tell them -- they get
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comments and make different categories. justice alito: how can we tell the degree to which costs without knowing the criteria for creating subcategories? mr. smith: it is in the statute. justice alito: no, the 12% came into play after you created the category. mr. smith: right. justice alito: how do i know they create the subcategories? mr. smith: you can see it in a notice of proposed rulemaking. what happens is people comment and say, we are so different from that category. we have special problems. justice kagan: it is a rulemaking after the rulemaking that applies to the listing, is that right?
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