On April 17, 2006, Michigan Gov. Jennifer Granholm directed the Department of Environmental Quality to draft a rule under the state’s Clean Air Act to reduce mercury emissions from coal-fired power plants by 90 percent. The governor ordered the reductions to occur in two phases. The first phase is supposed to entail the reduction schedule established by the U.S. Environmental Protection Agency last year. The second phase is supposed to exceed the federal requirements by reducing emissions 90 percent by the year 2015.

The governor’s mercury directive carries huge economic consequences for energy suppliers, industry and consumers. Calculating both the benefits and the costs requires careful examination of the sources of mercury in Michigan, the scientific facts about the risks of mercury exposure, and the likely impact of reductions on future mercury levels in the state. We examine these issues in this report to assist lawmakers, the media and the public in determining whether the governor’s mercury reduction mandate constitutes sound policy.

Based on our analysis, we conclude that Gov. Granholm’s mercury directive will impose significant costs on the Michigan economy without materially benefiting public health or the environment. The state would do better to defer control requirements that exceed the federal standards, and cooperate with neighboring states and the EPA to better define the risks associated with mercury exposures as well as to refine our understanding of the interplay between mercury emissions, depositions and bioaccumulation.