THE ETHICAL DIMENSION In this case, aquatic organisms were most directly at risk. Is it acceptable to apply cost-benefit analyses to situations in which the lives of people are directly affected? Explain.

THE GLOBAL DIMENSION In analyzing the costs and benefits of an action that affects the environment, should a line be drawn at a nation’s borders? Why or why not?

As part of its implementation of the Clean Water Act, the Environmental Protection Agency (EPA) has developed two sets of rules that apply to the cooling systems of power plants. Phase I rules require new power plants to restrict their inflow of water “to a level commensurate with that which can be attained by a closed-cycle recalculating cooling water system.” Phase II rules apply “national performance standards” to more than five hundred existing plants but do not require closed-cycle cooling systems. The EPA found that converting these facilities to closed-cycle operations would cost $3.5 billion per year. The facilities would then produce less power while burning the same amount of coal. Moreover, other technologies can attain nearly the same results as closed-cycle systems. Phase II rules also allow a variance from the national performance standards if a facility’s cost of compliance “would be significantly greater than the benefits.” Environmental organizations, including River-keeper, Inc., challenged the Phase II regulations, arguing that existing plants should be required to convert to closed-cycle systems. The U.S. Court of Appeals for the Second Circuit issued a ruling in the plaintiffs’ favor. Power-generating companies, including Entergy Corporation, appealed to the United States Supreme Court.