NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the Reporter
of Decisions, Supreme Court of the United States, Washington,
D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print
goes to press.

															SUPREME COURT OF THE UNITED STATES

															_________________

															Nos. 14–46, 14–47, and 14–49

															_________________

															MICHIGAN, et al., PETITIONERS

															14–46 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.

															UTILITY AIR REGULATORY GROUP,
PETITIONER

															14–47 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.

															NATIONAL MINING ASSOCIATION,
PETITIONER

															14–49 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.

															on writs of certiorari to the united states
court of appeals for the district of columbia circuit

															[June 29, 2015]

															Justice Scalia delivered the opinion of the
Court.

															The Clean Air Act directs the Environmental
Protection Agency to regulate emissions of hazardous air pollutants
from power plants if the Agency finds regulation “appropriate and
necessary.” We must decide whether it was reasonable for EPA to
refuse to consider cost when making this finding.

															I

															The Clean Air Act establishes a series of
regulatory programs to control air pollution from stationary
sources (such as refineries and factories) and moving sources (such
as cars and airplanes). 69Stat. 322, as amended, 42
U. S. C. §§7401–7671q. One of these is the National
Emissions Standards for Hazardous Air Pollutants Program—the
hazardous-air-pollutants program, for short. Established in its
current form by the Clean Air Act Amendments of 1990, 104Stat.
2531, this program targets for regulation stationary-source
emissions of more than 180 specified “hazardous air pollutants.”
§7412(b).

															For stationary sources in general, the
applicability of the program depends in part on how much pollution
the source emits. A source that emits more than 10 tons of a single
pollutant or more than 25 tons of a combination of pollutants per
year is called a major source. §7412(a)(1). EPA is required to
regulate all major sources under the program. §7412(c)(1)–(2). A
source whose emissions do not cross the just-mentioned thresholds
is called an area source. §7412(a)(2). The Agency is required to
regulate an area source under the program if it “presents a threat
of adverse effects to human health or the environment
. . . warranting regulation.” §7412(c)(3).

															At the same time, Congress established a unique
procedure to determine the applicability of the program to
fossil-fuel-fired power plants. The Act refers to these plants as
electric utility steam generating units, but we will simply call
them power plants. Quite apart from the hazardous-air-pollutants
program, the Clean Air Act Amendments of 1990 subjected power
plants to various regulatory requirements. The parties agree that
these requirements were expected to have the collateral effect of
reducing power plants’ emissions of hazardous air pollutants,
although the extent of the reduction was unclear. Congress directed
the Agency to “perform a study of the hazards to public health
reasonably anticipated to occur as a result of emissions by [power
plants] of [hazardous air pollutants] after imposition of the
requirements of this chapter.” §7412(n)(1)(A). If the Agency “finds
. . . regulation is appropriate and necessary after
considering the results of the study,” it “shall regulate [power
plants] under [§7412].” Ibid. EPA has interpreted the Act to
mean that power plants become subject to regulation on the same
terms as ordinary major and area sources, see 77 Fed. Reg. 9330
(2012), and we assume without deciding that it was correct to do
so.

															And what are those terms? EPA must first divide
sources covered by the program into categories and subcategories in
accordance with statutory criteria. §7412(c)(1). For each category
or subcategory, the Agency must promulgate certain minimum emission
regulations, known as floor standards. §7412(d)(1), (3). The
statute generally calibrates the floor standards to reflect the
emissions limitations already achieved by the best-performing 12%
of sources within the category or subcategory. §7412(d)(3). In some
circumstances, the Agency may also impose more stringent emission
regulations, known as beyond-the-floor standards. The statute
expressly requires the Agency to consider cost (alongside other
specified factors) when imposing beyond-the-floor standards.
§7412(d)(2).

															EPA completed the study required by
§7412(n)(1)(A) in 1998, 65 Fed. Reg. 79826 (2000), and concluded
that regulation of coal- and oil-fired power plants was
“appropriate and necessary” in 2000, id., at 79830. In 2012,
it reaffirmed the appropriate-and-necessary finding, divided power
plants into subcategories, and promulgated floor standards. The
Agency found regulation “appropriate” because (1) power plants’
emissions of mercury and other hazardous air pollutants posed risks
to human health and the environment and (2) controls were available
to reduce these emissions. 77 Fed. Reg. 9363. It found regulation
“necessary” because the imposition of the Act’s other requirements
did not eliminate these risks. Ibid. EPA concluded that
“costs should not be considered” when deciding whether power plants
should be regulated under §7412. Id., at 9326.

															In accordance with Executive Order, the Agency
issued a “Regulatory Impact Analysis” alongside its regulation.
This analysis estimated that the regulation would force power
plants to bear costs of $9.6 billion per year. Id., at 9306.
The Agency could not fully quantify the benefits of reducing power
plants’ emissions of hazardous air pollutants; to the extent it
could, it estimated that these benefits were worth $4 to $6 million
per year. Ibid. The costs to power plants were thus between
1,600 and 2,400 times as great as the quantifiable benefits from
reduced emissions of hazardous air pollutants. The Agency continued
that its regulations would have ancillary benefits—including
cutting power plants’ emissions of particulate matter and sulfur
dioxide, substances that are not covered by the
hazardous-air-pollutants program. Although the Agency’s
appropriate-and-necessary finding did not rest on these ancillary
effects, id., at 9320, the regulatory impact analysis took
them into account, increasing the Agency’s estimate of the
quantifiable benefits of its regulation to $37 to $90 billion per
year, id., at 9306 . EPA concedes that the regulatory
impact analysis “played no role” in its appropriate-and-necessary
finding. Brief for Federal Respondents 14.

															Petitioners (who include 23 States) sought
review of EPA’s rule in the Court of Appeals for the D. C.
Circuit. As relevant here, they challenged the Agency’s refusal to
consider cost when deciding whether to regulate power plants. The
Court of Appeals upheld the Agency’s decision not to consider cost,
with Judge Kavanaugh concurring in part and dissenting in part. White Stallion Energy Center, LLC v. EPA , 748
F. 3d 1222 (2014) ( per curiam ). We granted certiorari.
574 U. S. ___ (2014).

															II

															Federal administrative agencies are required
to engage in “reasoned decisionmaking.” Allentown Mack Sales
& Service, Inc. v. NLRB , 522 U. S. 359, 374
(1998) (internal quotation marks omitted). “Not only must an
agency’s decreed result be within the scope of its lawful
authority, but the process by which it reaches that result must be
logical and rational.” Ibid. It follows that agency action
is lawful only if it rests “on a consideration of the relevant
factors.” Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co. , 463 U. S. 29,
43 (1983) (internal quotation marks omitted).

															EPA’s decision to regulate power plants under
§7412 allowed the Agency to reduce power plants’ emissions of
hazardous air pollutants and thus to improve public health and the
environment. But the decision also ultimately cost power plants,
according to the Agency’s own estimate, nearly $10 billion a year.
EPA refused to consider whether the costs of its decision
outweighed the benefits. The Agency gave cost no thought at
all , be-cause it considered cost irrelevant to its initial
decision to regulate.

															EPA’s disregard of cost rested on its
interpretation of §7412(n)(1)(A), which, to repeat, directs the
Agency to regulate power plants if it “finds such regulation is
appropriate and necessary.” The Agency accepts that it could have interpreted this provision to mean that cost is relevant to
the decision to add power plants to the program. Tr. of Oral Arg.
44. But it chose to read the statute to mean that cost makes no
difference to the initial decision to regulate. See 76 Fed. Reg.
24988 (2011) (“We further interpret the term ‘appropriate’ to not
allow for the consideration of costs”); 77 Fed. Reg. 9327 (“Cost
does not have to be read into the definition of
‘appropriate’ ”).

															We review this interpretation under the standard
set out in Chevron U. S. A. Inc. v. Natural
Resources Defense Council, Inc. , 467 U. S. 837 (1984) . Chevron directs courts to accept an agency’s reasonable
resolution of an ambigu-ity in a statute that the agency
administers. Id., at 842–843. Even under this deferential
standard, however, “agencies must operate within the bounds of
reasonable interpretation. ” Utility Air Regulatory
Group v. EPA , 573 U. S. ___, ___ (2014) (slip op.,
at 16) (internal quotation marks omitted). EPA strayed far beyond
those bounds when it read §7412(n)(1) to mean that it could ignore
cost when deciding whether to regulate power plants.

															A

															The Clean Air Act treats power plants
differently from other sources for purposes of the
hazardous-air-pollutants program. Elsewhere in §7412, Congress
established cabined criteria for EPA to apply when deciding whether
to include sources in the program. It required the Agency to
regulate sources whose emissions exceed specified numerical
thresholds (major sources). It also required the Agency to regulate
sources whose emissions fall short of these thresholds (area
sources) if they “presen[t] a threat of adverse effects to human
health or the environment . . . warranting regulation.”
§7412(c)(3). In stark contrast, Congress instructed EPA to add
power plants to the program if (but only if) the Agency finds
regulation “appropriate and necessary.” §7412(n)(1)(A). One does
not need to open up a dictionary in order to realize the
capaciousness of this phrase. In particular, “appropriate” is “the
classic broad and all-encompassing term that naturally and
traditionally includes consideration of all the relevant factors.”
748 F. 3d, at 1266 (opinion of Kavanaugh, J.). Although this
term leaves agencies with flexibility, an agency may not “entirely
fai[l] to consider an important aspect of the problem” when
deciding whether regulation is appropriate. State Farm , supra , at 43.

															Read naturally in the present context, the
phrase “appropriate and necessary” requires at least some attention
to cost. One would not say that it is even rational, never mind
“appropriate,” to impose billions of dollars in economic costs in
return for a few dollars in health or environmental benefits. In
addition, “cost” includes more than the expense of complying with
regulations; any disadvantage could be termed a cost. EPA’s
interpretation precludes the Agency from considering any type of cost—including, for instance, harms that regulation might
do to human health or the environment. The Government concedes that
if the Agency were to find that emissions from power plants do
damage to human health, but that the technologies needed to
eliminate these emissions do even more damage to human health, it
would still deem regulation appropriate. See Tr. of Oral
Arg. 70. No regulation is “appropriate” if it does significantly
more harm than good.

															There are undoubtedly settings in which the
phrase “appropriate and necessary” does not encompass cost. But
this is not one of them. Section 7412(n)(1)(A) directs EPA to
determine whether “ regulation is appropriate and necessary.”
(Emphasis added.) Agencies have long treated cost as a centrally
relevant factor when deciding whether to regulate. Consideration of
cost reflects the understanding that reasonable regulation
ordinarily requires paying attention to the advantages and the disadvantages of agency decisions. It also reflects the reality
that “too much wasteful expenditure devoted to one problem may well
mean considerably fewer resources available to deal effectively
with other (perhaps more serious) problems.” Entergy Corp. v. Riverkeeper, Inc. , 556 U. S. 208, 233 (2009)
(Breyer, J., concurring in part and dissenting in part). Against
the backdrop of this established administrative practice, it is
unreasonable to read an instruction to an administrative agency to
determine whether “regulation is appropriate and necessary” as an
invitation to ignore cost.

															Statutory context reinforces the relevance of
cost. The procedures governing power plants that we consider today
appear in §7412(n)(1), which bears the caption “Electric utility
steam generating units.” In subparagraph (A), the part of the law
that has occupied our attention so far, Congress required EPA to
study the hazards to public health posed by power plants and to
determine whether regulation is appropriate and necessary. But in
subparagraphs (B) and (C), Congress called for two additional
studies. One of them, a study into mercury emissions from power
plants and other sources, must consider “the health and
environmental effects of such emissions, technologies which are
available to control such emissions, and the costs of such
technologies .” §7412(n)(1)(B) (emphasis added). This directive
to EPA to study cost is a further indication of the relevance of
cost to the decision to regulate.

															In an effort to minimize this express reference
to cost, EPA now argues that §7412(n)(1)(A) requires it to consider
only the study mandated by that provision, not the separate mercury
study, before deciding whether to regulate power plants. But when
adopting the regulations before us, the Agency insisted that the
provisions concerning all three studies “provide a framework for
[EPA’s] determination of whether to regulate [power plants].” 76
Fed. Reg. 24987. It therefore decided “to interpret the scope of
the appropriate and necessary finding in the context of all three studies .” 77 Fed. Reg. 9325 (emphasis added). For
example:

															EPA considered environmental effects
relevant to the appropriate-and-necessary finding. It deemed the
mercury study’s reference to this factor “direct evidence that
Congress was concerned with environmental effects.” 76 Fed. Reg.
24987.

															EPA considered availability of controls
relevant to the appropriate-and-necessary finding. It thought that
doing so was “consistent with” the mercury study’s reference to
availability of controls. Id., at 24989.

															EPA concluded that regulation of power
plants would be appropriate and necessary even if a single
pollutant emitted by them posed a hazard to health or the
environment. It believed that “Congress’ focus” on a single
pollutant in the mercury study “support[ed]” this interpretation. Ibid. EPA has not explained why §7412(n)(1)(B)’s
reference to “environmental effects . . . and
. . . costs” provides “direct evidence that Congress was
concerned with environmental effects,” but not “direct evidence”
that it was concerned with cost. Chevron allows agencies to
choose among competing reasonable interpretations of a statute; it
does not license interpretive gerrymanders under which an agency
keeps parts of statutory context it likes while throwing away parts
it does not.

															B

															EPA identifies a handful of reasons to
interpret §7412(n)(1)(A) to mean that cost is irrelevant to the
initial decision to regulate. We find those reasons
unpersuasive.

															EPA points out that other parts of the Clean Air
Act expressly mention cost, while §7412(n)(1)(A) does not. But this
observation shows only that §7412(n)(1)(A)’s broad reference to
appropriateness encompasses multiple relevant factors (which
include but are not limited to cost); other provisions’ specific
references to cost encompass just cost. It is unreasonable to infer
that, by expressly making cost relevant to other decisions, the Act
implicitly makes cost irrelevant to the appropriateness of
regulating power plants. (By way of analogy, the Fourth Amendment’s
Reasonableness Clause requires searches to be “[r]easonable,” while
its Warrant Clause requires warrants to be supported by “probable
cause.” Nobody would argue that, by expressly making level of
suspicion relevant to the validity of a warrant, the Fourth
Amendment implicitly makes level of suspicion categorically irrelevant to the reasonableness of a search. To the
contrary, all would agree that the expansive word “reasonable”
encompasses degree of suspicion alongside other relevant
circumstances.) Other parts of the Clean Air Act also expressly
men-tion environmental effects, while §7412(n)(1)(A) does not. Yet
that did not stop EPA from deeming environmental effects relevant
to the appropriateness of regulating power plants.

															Along similar lines, EPA seeks support in this
Court’s decision in Whitman v. American Trucking Assns.,
Inc. , 531 U. S. 457 (2001) . There, the Court addressed a
provision of the Clean Air Act requiring EPA to set ambient air
quality standards at levels “requisite to protect the public
health” with an “adequate margin of safety.” 42 U. S. C.
§7409(b). Read naturally, that discrete criterion does not
encompass cost; it encompasses health and safety. The Court refused
to read that provision as carrying with it an implicit
authorization to consider cost, in part because authority to
consider cost had “elsewhere, and so often, been expressly
granted.” 531 U. S., at 467. American Trucking thus
establishes the modest principle that where the Clean Air Act
expressly directs EPA to regulate on the basis of a factor that on
its face does not include cost, the Act normally should not be read
as implicitly allowing the Agency to consider cost anyway. That
principle has no application here. “Appropriate and necessary” is a
far more comprehensive criterion than “requisite to protect the
public health”; read fairly and in context, as we have explained,
the term plainly subsumes consideration of cost.

															Turning to the mechanics of the
hazardous-air-pollutants program, EPA argues that it need not
consider cost when first deciding whether to regulate power
plants because it can consider cost later when deciding how
much to regulate them. The question before us, however, is the
meaning of the “appropriate and necessary” standard that governs
the initial decision to regulate. And as we have discussed, context
establishes that this expansive standard encompasses cost. Cost may
become relevant again at a later stage of the regulatory process,
but that possibility does not establish its irrelevance at this stage. In addition, once the Agency decides to regulate
power plants, it must promulgate certain minimum or floor standards
no matter the cost (here, nearly $10 billion a year); theAgency may
consider cost only when imposing regulations beyond these
minimum standards. By EPA’s logic, someone could decide whether it
is “appropriate” to buy a Ferrari without thinking about cost,
because he plans to think about cost later when deciding whether to
upgrade the sound system.

															EPA argues that the Clean Air Act makes cost
irrelevant to the initial decision to regulate sources other than
power plants. The Agency claims that it is reasonable to interpret
§7412(n)(1)(A) in a way that “harmonizes” the program’s treatment
of power plants with its treatment of other sources. This line of
reasoning overlooks the whole point of having a separate provision
about power plants: treating power plants differently from
other stationary sources. Congress crafted narrow standards for EPA
to apply when deciding whether to regulate other sources; in
general, these standards concern the volume of pollution emitted by
the source, §7412(c)(1), and the threat posed by the source “to
human health or the environment,” §7412(c)(3). But Congress wrote
the provision before us more expansively, directing the Agency to
regulate power plants if “appropriate and necessary.” “That
congressional election settles this case. [The Agency’s] preference
for symmetry cannot trump an asymmetrical statute.” CSX Transp.,
Inc. v. Alabama Dept. of Revenue , 562 U. S. 277,
296 (2011) .

															EPA persists that Congress treated power plants
differently from other sources because of uncertainty about whether
regulation of power plants would still be needed after the
application of the rest of the Act’s requirements. That is
undoubtedly one of the reasons Congress treated power plants
differently; hence §7412(n)(1)(A)’s requirement to study hazards
posed by power plants’ emissions “after imposition of the
requirements of [the rest of the Act].” But if uncertainty about
the need for regulation were the only reason to treat power
plants differently, Congress would have required the Agency to
decide only whether regulation remains “necessary,” not whether
regulation is “appropriate and necessary.” In any event, EPA
stated when it adopted the rule that “Congress did not limit [the]
appropriate and necessary inquiry to [the study mentioned in
§7412(n)(1)(A)].” 77 Fed. Reg. 9325. The Agency instead decided
that the appropriate-and-necessary finding should be understood in
light of all three studies required by §7412(n)(1), and as we have
discussed, one of those three studies reflects concern about
cost.

															C

															The dissent does not embrace EPA’s far-reaching
claim that Congress made costs altogether irrelevant to the
decision to regulate power plants. Instead, it maintains that EPA
need not “explicitly analyze costs” before deeming regulation
appropriate, because other features of the regulatory program will
on their own ensure the cost-effectiveness of regulation. Post, at 2 (opinion of Kagan, J.). This line of reasoning
contradicts the foundational principle of administrative law that a
court may uphold agency action only on the grounds that the agency
invoked when it took the action. SEC v. Chenery
Corp. , 318 U. S. 80, 87 (1943). When it deemed regulation
of power plants appropriate, EPA said that cost was irrelevant to that determination—not that cost-benefit
analysis would be deferred until later. Much less did it say
(what the dissent now concludes) that the consideration of cost at
subsequent stages will ensure that the costs are not
disproportionate to the benefits. What it said is that cost is
irrelevant to the decision to regulate.

															That is enough to decide these cases. But for
what it is worth, the dissent vastly overstates the influence of
cost at later stages of the regulatory process. For example, the
dissent claims that the floor standards—which the Act calibrates to
reflect emissions limitations already achieved by the
best-performing sources in the industry—reflect cost
considerations, because the best-performing power plants “must have
considered costs in arriving at their emissions outputs.” Post, at 10. EPA did not rely on this argument, and it is
not obvious that it is correct. Because power plants are regulated
under other federal and state laws, the best-performing power
plants’ emissions limitations might reflect cost-blind regulation
rather than cost-conscious decisions. Similarly, the dissent
suggests that EPA may consider cost when dividing sources into
categories and subcategories. Post, at 11–12. Yet according
to EPA, “it is not appropriate to premise subcategorization
on costs.” 77 Fed. Reg. 9395 (emphasis added). That statement
presumably explains the dissent’s carefully worded observation that
EPA considered “technological, geographic, and other factors” when
drawing categories, post, at 13, n. 4, which factors
were in turn “related to costs” in some way, post, at 11.
Attenuated connections such as these hardly support the assertion
that EPA’s regulatory process featured “exhaustive consideration of
costs,” post, at 2.

															All in all, the dissent has at most shown that
some elements of the regulatory scheme mitigate cost in limited
ways; it has not shown that these elements ensure
cost-effectiveness. If (to take a hypothetical example) regulating
power plants would yield $5 million in benefits, the prospect of
mitigating cost from $11 billion to $10 billion at later stages of
the program would not by itself make regulation appropriate. In all
events, we need not pursue these points, because EPA did not say
that the parts of the regulatory program mentioned by the dissent
prevent the imposition of costs far in excess of benefits. “[EPA’s]
action must be measured by what [it] did, not by what it might have
done.” Chenery , supra , at 93–94.

															D

															Our reasoning so far establishes that it was
unreasonable for EPA to read §7412(n)(1)(A) to mean that cost is
irrelevant to the initial decision to regulate power plants. The
Agency must consider cost—including, most importantly, cost of
compliance—before deciding whether regulation is appropriate and
necessary. We need not and do not hold that the law unambiguously
required the Agency, when making this preliminary estimate, to
conduct a formal cost-benefit analysis in which each advantage and
disadvantage is assigned a monetary value. It will be up to the
Agency to decide (as always, within the limits of reasonable
interpretation) how to account for cost.

															Some of the respondents supporting EPA ask us to
uphold EPA’s action because the accompanying regulatory impact
analysis shows that, once the rule’s ancillary benefits are
considered, benefits plainly outweigh costs. The dissent similarly
relies on these ancillary benefits when insisting that “the outcome
here [was] a rule whose benefits exceed its costs.” Post, at
16. As we have just explained, however, we may uphold agency action
only upon the grounds on which the agency acted. Even if the Agency could have considered ancillary benefits when deciding
whether regulation is appropriate and necessary—a point we need not
address—it plainly did not do so here. In the Agency’s own words,
the administrative record “utterly refutes [the] assertion that
[ancillary benefits] form the basis for the appropriate and
necessary finding.” 77 Fed. Reg. 9323. The Government concedes,
moreover, that “EPA did not rely on the [regulatory impact
analysis] when deciding to regulate power plants,” and that “[e]ven
if EPA had considered costs, it would not necessarily have adopted
. . . the approach set forth in [that analysis].” Brief
for Federal Respondents 53–54.

															*  *  *

															We hold that EPA interpreted §7412(n)(1)(A)
unreasonably when it deemed cost irrelevant to the decision to
regulate power plants. We reverse the judgment of the Court of
Appeals for the D. C. Circuit and remand the cases for further
proceedings consistent with this opinion.

															It is so ordered . SUPREME COURT OF THE UNITED STATES

															_________________

															Nos. 14–46, 14–47, and 14–49

															_________________

															MICHIGAN, et al., PETITIONERS

															14–46 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.

															UTILITY AIR REGULATORY GROUP,
PETITIONER

															14–47 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.

															NATIONAL MINING ASSOCIATION,
PETITIONER

															14–49 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.

															on writs of certiorari to the united states
court of appeals for the district of columbia circuit

															[June 29, 2015]

															Justice Thomas, concurring.

															The Environmental Protection Agency (EPA) asks
the Court to defer to its interpretation of the phrase “appropriate
and necessary” in §112(n)(1)(A) of the Clean Air Act, 42
U. S. C. §7412. Justice Scalia’s opinion for the Court
demonstrates why EPA’s interpretation deserves no deference under
our precedents. I write separately to note that its request for
deference raises serious questions about the constitutionality of
our broader practice of deferring to agency interpretations of
federal statutes. See Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. , 467 U. S. 837
(1984) . Chevron deference is premised on “a
presumption that Congress, when it left ambiguity in a statute
meant for implementation by an agency, understood that the
ambiguity would be resolved, first and foremost, by the agency, and
desired the agency (rather than the courts) to possess whatever
degree of discretion the ambiguity allows.” Smiley v. Citibank (South Dakota), N. A. , 517 U. S. 735 –741
(1996). We most often describe Congress’ supposed choice to leave
matters to agency discretion as an allocation of interpretive
authority. See, e.g., National Cable &
Telecommunications Assn. v. Brand X Internet Services ,
545 U. S. 967, 983 (2005) (referring to the agency as “the
authoritative interpreter (within the limits of reason) of
[ambiguous] statutes”). But we sometimes treat that discretion as
though it were a form of legislative power. See, e.g., United
States v. Mead Corp. , 533 U. S. 218, 229 (2001)
(noting that the agency “speak[s] with the force of law when it
addresses ambiguity in the statute or fills a space in the enacted
law” even when “ ‘Congress did not actually have an intent’ as
to a particular result”). Either way, Chevron deference
raises serious separation-of-powers questions.

															As I have explained elsewhere, “[T]he judicial
power, as originally understood, requires a court to exercise its
independent judgment in interpreting and expounding upon the laws.” Perez v. Mortgage Bankers Assn. , 575 U. S. ___,
___ (2015) (opinion concurring in judgment) (slip op., at 8).
Interpreting federal statutes—including ambiguous ones administered
by an agency—“calls for that exercise of independent judgment.” Id., at ___ (slip op., at 12). Chevron deference
precludes judges from exercising that judgment, forcing them to
abandon what they believe is “the best reading of an ambiguous
statute” in favor of an agency’s construction. Brand X , supra, at 983. It thus wrests from Courts the ultimate
interpretative authority to “say what the law is,” Marbury v. Madison , 1 Cranch 137, 177 (1803), and hands it over to
the Executive. See Brand X , supra, at 983 (noting
that the judicial construction of an ambiguous statute is “not
authoritative”). Such a transfer is in tension with Article III’s
Vesting Clause, which vests the judicial power exclusively in
Article III courts, not administrative agencies. U. S. Const.,
Art. III, §1.

															In reality, as the Court illustrates in the
course of dismantling EPA’s interpretation of §112(n)(1)(A),
agencies “interpreting” ambiguous statutes typically are not
engaged in acts of interpretation at all. See, e.g., ante, at 9. Instead, as Chevron itself acknowledged,
they are engaged in the “ ‘formulation of policy.’ ” 467
U. S., at 843. Statu-tory ambiguity thus becomes an implicit
delegation of rule-making authority, and that authority is used not
to find the best meaning of the text, but to formulate legally
binding rules to fill in gaps based on policy judgments made by the
agency rather than Congress.

															Although acknowledging this fact might allow us
to escape the jaws of Article III’s Vesting Clause, it runs
headlong into the teeth of Article I’s, which vests “[a]ll
legislative Powers herein granted” in Congress. U. S. Const.,
Art I., §1. For if we give the “force of law” to agency
pronouncements on matters of private conduct as towhich
“ ‘Congress did not actually have an intent,’ ” Mead , supra, at 229, we permit a body other than
Congress to perform a function that requires an exercise of the
legislative power. See Department of Transportation v. Association of American Railroads , 575 U. S. ___,
___–___ (2015) (Thomas, J., concurring in judgment) (slip op., at
21–22).

															These cases bring into bold relief the scope of
the potentially unconstitutional delegations we have come to
countenance in the name of Chevron deference. What EPA
claims for itself here is not the power to make political judgments
in implementing Congress’ policies, nor even the power to make
tradeoffs between competing policy goals set by Congress, American Railroads , supra , at ___–___ (opinion of
Thomas, J.) (slip op., at 20–21) (collecting cases involving
statutes that delegated this legislative authority). It is the
power to decide—without any particular fidelity to the text—which
policy goals EPA wishes to pursue. Should EPA wield its vast powers
over electric utilities to protect public health? A pristine
environment? Economic security? We are told that the breadth of the
word “appropriate” authorizes EPA to decide for itself how to
answer that question. Compare 77 Fed. Reg. 9327 (2012) (“[N]othing
about the definition [of “appropriate”] compels a
consideration of costs” (emphasis added)) with Tr. of Oral Arg. 42
(“[T]he phrase appropriate and necessary doesn’t, by its terms, preclude the EPA from considering cost” (emphasis
added)).[ 1 ]

															Perhaps there is some unique historical
justification for deferring to federal agencies, see Mead , supra, at 243 (Scalia, J., dissenting), but these cases
reveal how paltry an effort we have made to understand it or to
confine ourselves to its boundaries. Although we hold today that
EPA exceeded even the extremely permissive limits on agency power
set by our precedents, we should be alarmed that it felt
sufficiently emboldened by those precedents to make the bid for
deference that it did here.[ 2 ]
As in other areas of our jurisprudence concerning administrative
agencies, see, e.g., B&B Hardware, Inc. v. Hargis
Industries, Inc. , 575 U. S. ___, ___–___ (2015) (Thomas,
J., dissenting) (slip op., at 10–14), we seem to be straying
further and further from the Constitution without so much as
pausing to ask why. We should stop to consider that document before
blithely giving the force of law to any other agency
“interpretations” of federal statutes. Notes 1 I can think of no name
for such power other than “legislative power.” Had we deferred to
EPA’s interpretation in these cases, then, we might have violated
another constitutional command by abdicating our check on the
political branches—namely, our duty to enforce the rule of law
through an exercise of the judicial power. Perez v. Mortgage Bankers Assn. , 575 U. S. ___, ___–___ (2015)
(Thomas, J., concurring in judgment) (slip op., at
14–16). 2 This is not the first
time an agency has exploited our practice of deferring to agency
interpretations of statutes. See, e.g., Texas Dept. of Housing
and Community Affairs v. Inclusive Communities Project,
Inc., ante, at 6–7 (Thomas, J., dissenting). SUPREME COURT OF THE UNITED STATES

															_________________

															Nos. 14–46, 14–47, and 14–49

															_________________

															MICHIGAN, et al., PETITIONERS

															14–46 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.

															UTILITY AIR REGULATORY GROUP,
PETITIONER

															14–47 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.

															NATIONAL MINING ASSOCIATION,
PETITIONER

															14–49 v. ENVIRONMENTAL PROTECTION AGENCY,
et al.

															on writs of certiorari to the united states
court of appeals for the district of columbia circuit

															[June 29, 2015]

															Justice Kagan, with whom Justice Ginsburg,
Justice Breyer, and Justice Sotomayor join,dissenting.

															The Environmental Protection Agency placed
emissions limits on coal and oil power plants following a lengthy
regulatory process during which the Agency carefully considered
costs. At the outset, EPA determined that regulating plants’
emissions of hazardous air pollutants is “appropriate and
necessary” given the harm they cause, and explained that it would
take costs into account in developing suitable emissions standards.
Next, EPA divided power plants into groups based on technological
and other characteristics bearing significantly on their cost
structures. It required plants in each group to match the emissions
levels already achieved by the best-performing members of the same
group—benchmarks necessarily reflecting those plants’ own cost
analyses. EPA then adopted a host of measures designed to make
compliance with its proposed emissions limits less costly for
plants that needed to catch up with their cleaner peers. And with
only one narrow exception, EPA decided not to impose any more
stringent standards (beyond what some plants had already achieved
on their own) because it found that doing so would not be
cost-effective. After all that, EPA conducted a formal cost-benefit
study which found that the quantifiable benefits of its regulation
would exceed the costs up to nine times over—by as much as $80
billion each year. Those benefits include as many as 11,000 fewer
premature deaths annually, along with a far greater number of
avoided illnesses.

															Despite that exhaustive consideration of costs,
the Court strikes down EPA’s rule on the ground that the Agency
“unreasonably . . . deemed cost irrelevant.” Ante ,
at 15. On the majority’s theory, the rule is invalid because EPA
did not explicitly analyze costs at the very first stage of the
regulatory process, when making its “appropriate and necessary”
finding. And that is so even though EPA later took costs into
account again and again and . . . so on. The majority
thinks entirely immaterial, and so entirely ignores, all the
subsequent times and ways EPA considered costs in deciding what any
regulation would look like.

															That is a peculiarly blinkered way for a court
to assess the lawfulness of an agency’s rulemaking. I agree with
the majority—let there be no doubt about this—that EPA’s power
plant regulation would be unreasonable if “[t]he Agency gave cost
no thought at all .” Ante , at 5 (emphasis in
original). But that is just not what happened here. Over more than
a decade, EPA took costs into account at multiple stages and
through multiple means as it set emissions limits for power plants.
And when making its initial “appropriate and necessary” finding,
EPA knew it would do exactly that—knew it would thoroughly consider
the cost-effectiveness of emissions standards later on. That
context matters. The Agency acted well within its authority in
declining to consider costs at the opening bell of the regulatory
process given that it would do so in every round thereafter—and
given that the emissions limits finally issued would depend
crucially on those accountings. Indeed, EPA could not have measured
costs at the process’s initial stage with any accuracy. And the
regulatory path EPA chose parallels the one it has trod in setting
emissions limits, at Congress’s explicit direction, for every other
source of hazardous air pollutants over two decades. The majority’s
decision that EPA cannot take the same approach here—its
micromanagement of EPA’s rulemaking, based on little more than the
word “appropriate”—runs counter to Congress’s allocation of
authority between the Agency and the courts. Because EPA reasonably
found that it was “appropriate” to decline to analyze costs at a
single stage of a regulatory proceeding otherwise imbued with cost
concerns, I respectfully dissent

															I

															A

															The Clean Air Act Amendments of 1990, as the
majority describes, obligate EPA to regulate emissions of mercury
and other hazardous air pollutants from stationary sources
discharging those substances in large quantities. See ante ,
at 2. For most industries, the statute prescribes the same
multi-step regulatory process. At the initial stage, EPA must
decide whether to regulate a source, based solely on the quantity
of pollutants it emits and their health and environmental effects.
See 42 U. S. C. §§7412(a)(1), (a)(2), (c)(1), (c)(3); ante , at 2. Costs enter the equation after that, affecting
the emissions limits that the eventual regulation will require.
Under the statute, EPA must divide sources into categories and
subcategories and then set “floor standards” that reflect the
average emissions level already achieved by the best-performing 12%
of sources within each group. See §7412(d)(3); ante , at 3.
Every 12% floor has cost concerns built right into it because the
top sources, as successful actors in a market economy, have had to
consider costs in choosing their own emissions levels. Moreover, in
establishing categories and subcategories at this first stage, EPA
can (significantly) raise or lower the costs of regulation for each
source, because different classification schemes will alter the
group—and so the emissions level—that the source has to
match.[ 1 ] Once the floor is
set, EPA has to decide whether to impose any stricter
(“beyond-the-floor”) standards, “taking into consideration,” among
other things, “the cost of achieving such emissions reduction.”
§7412(d)(2); see ante , at 3. Finally, by virtue of a
longstanding Executive Order applying to significant rules issued
under the Clean Air Act (as well as other statutes), the Agency
must systematically assess the regulation’s costs and benefits. See
Exec. Order No. 12866, 58 Fed. Reg. 51735, 51738, 51741 (1993)
(applying to all rules with an annual economic effect of at least
$100 million).

															Congress modified that regulatory scheme for
power plants. It did so because the 1990 amendments established a
separate program to control power plant emissions contributing to
acid rain, and many thought that just by complying with those
requirements, plants might reduce their emissions of hazardous air
pollutants to acceptable levels. See ante , at 2. That
prospect counseled a “wait and see” approach, under which EPA would
give the Act’s acid rain provisions a chance to achieve that side
benefit before imposing any further regulation. Accord-ingly,
Congress instructed EPA to “perform a study of the hazards to
public health reasonably anticipated” to result from power plants’
emissions after the 1990 amendments had taken effect.
§7412(n)(1)(A). And Congress provided that EPA “shall regulate”
those emissions only if the Agency “finds such regulation is
appropriate and necessary after considering the results of the
[public health] study.” Ibid. Upon making such a finding,
however, EPA is to regulate power plants as it does every other
stationary source: first, by categorizing plants and setting floor
standards for the different groups; then by deciding whether to
regulate beyond the floors; and finally, by conducting the
cost-benefit analysis required by Executive Order.

															EPA completed the mandated health study in 1998,
and the results gave much cause for concern. The Agency concluded
that implementation of the acid rain provisions had failed to curb
power plants’ emissions of hazardous air pollutants. Indeed, EPA
found, coal plants were on track to increase those emissions by as
much as 30% over the next decade. See 1 EPA, Study of Hazardous Air
Pollutant Emissions from Electric Utility Steam Generating
Units—Final Report to Congress, p. ES–25 (1998). And EPA
determined, focusing especially on mercury, that the substances
released from power plants cause substantial health harms. Noting
that those plants are “the largest [non-natural] source of mercury
emissions,” id. , §1.2.5.1, at 1–7, EPA found that children
of mothers exposed to high doses of mercury during pregnancy “have
exhibited a variety of developmental neurological abnormalities,”
including delayed walking and talking, altered muscles, and
cerebral palsy. Id. , §7.2.2, at 7–17 to 7–18; see also 7
EPA, Mercury Study Report to Congress, p. 6–31 (1997) (Mercury
Study) (estimating that 7% of women of childbearing age are exposed
to mercury in amounts exceeding a safe level).

															Informed by its public health study and
additional data, EPA found in 2000 that it is “appropriate and
necessary” to regulate power plants’ emissions of mercury and other
hazardous air pollutants. 65 Fed. Reg. 79830.[ 2 ] Pulling apart those two adjectives, the Agency
first stated that such regulation is “appropriate” because those
pollutants “present[ ] significant hazards to public health
and the environment” and because “a number of control options” can
“effectively reduce” their emission. Ibid. EPA then
determined that regulation is “necessary” because other parts of
the 1990 amendments—most notably, the acid rain provisions—“will
not adequately address” those hazards. Ibid. In less
bureaucratic terms, EPA decided that it made sense to kick off the
regulatory process given that power plants’ emissions pose a
serious health problem, that solutions to the problem are
available, and that the problem will remain unless action is
taken.

															B

															If the regulatory process ended as well as
started there, I would agree with the majority’s conclusion that
EPA failed to adequately consider costs. Cost is almost always a
relevant—and usually, a highly important—factor in regulation.
Unless Congress provides otherwise, an agency acts unreasonably in
establishing “a standard-setting proc-ess that ignore[s] economic
considerations.” Industrial Union Dept., AFL–CIO v. American Petroleum Institute , 448 U. S. 607, 670 (1980)
(Powell, J., concurring in part and concurring in judgment). At a
minimum, that is because such a process would “threaten[ ] to
impose massive costs far in excess of any benefit.” Entergy
Corp. v. Riverkeeper, Inc. , 556 U. S. 208, 234 (2009)
(Breyer, J., concurring in part and dissenting in part). And
accounting for costs is particularly important “in an age of
limited resources available to deal with grave environmental
problems, where too much wasteful expenditure devoted to one
problem may well mean considerably fewer resources available to
deal effectively with other (perhaps more serious) problems.” Id. , at 233; see ante , at 7. As the Court notes, that
does not require an agency to conduct a formal cost-benefit
analysis of every administrative action. See ante , at 14.
But (absent contrary indication from Congress) an agency must take
costs into account in some manner before imposing significant
regulatory burdens.

															That proposition, however, does not decide the
issue before us because the “appropriate and necessary” finding was
only the beginning. At that stage, EPA knew that a lengthy
rulemaking process lay ahead of it; the determination of emissions
limits was still years away. And the Agency, in making its kick-off
finding, explicitly noted that consideration of costs would follow:
“As a part of developing a regulation” that would impose those
limits, “the effectiveness and costs of controls will be examined.”
65 Fed. Reg. 79830. Likewise, EPA explained that, in the course of
writing its regulation, it would explore regula-tory approaches
“allowing for least-cost solutions.” Id. , at 79830–79831.
That means the Agency, when making its “appropriate and necessary”
finding, did not decline to consider costs as part of the
regulatory process. Rather, it declined to consider costs at a
single stage of that process, knowing that they would come in later
on.

															The only issue in these cases, then, is whether
EPA acted reasonably in structuring its regulatory process in that
way—in making its “appropriate and necessary finding” based on
pollution’s harmful effects and channeling cost considerations to
phases of the rulemaking in which emission levels are actually set.
Said otherwise, the question is not whether EPA can reasonably find
it “appropriate” to regulate without thinking about costs, full
stop. It cannot, and it did not. Rather, the question is whether
EPA can reasonably find it “appropriate” to trigger the regulatory
process based on harms (and technological feasibility) alone, given
that costs will come into play, in multiple ways and at multiple
stages, before any emission limit goes into effect.

															In considering that question, the very nature of
the word “appropriate” matters. “[T]he word ‘appropriate,’ ”
this Court has recognized, “is inherently context-dependent”:
Giving it content requires paying attention to the surrounding
circumstances. Sossamon v. Texas , 563 U. S. 277 , ___
(2011) (slip op., at 7). (That is true, too, of the word
“necessary,” although the majority spends less time on it. See Armour & Co. v. Wantock , 323 U. S. 126 –130
(1944) (“[T]he word ‘necessary’ . . . has always been recognized as
a word to be harmonized with its context”).) And here that means
considering the place of the “appropriate and necessary” finding in
the broader regulatory scheme—as a triggering mechanism that gets a
complex rulemaking going. The interpretive task is thus at odds
with the majority’s insistence on staring fixedly “at this stage.” Ante , at 11 (emphasis in original). The task instead
demands taking account of the entire regulatory process in thinking
about what is “appropriate” in its first phase. The statutory
language, in other words, is a directive to remove one’s blinders
and view things whole—to consider what it is fitting to do at the
threshold stage given what will happen at every other.

															And that instruction is primarily given to EPA,
not to courts: Judges may interfere only if the Agency’s way of
ordering its regulatory process is unreasonable— i.e. ,
something Congress would never have allowed. The question here, as
in our seminal case directing courts to defer to agency
interpretations of their own statutes, arises “not in a sterile
textual vacuum, but in the context of implementing policy decisions
in a technical and complex arena.” Chevron U. S. A.
Inc. v. Natural Resources DefenseCouncil, Inc. , 467
U. S. 837, 863 (1984) . EPA’s experience and expertise in that
arena—and courts’ lack of those attributes—demand that judicial
review proceed with caution and care. The majority actually phrases
this principle well, though honors it only in the breach: Within
wide bounds, it is “up to the Agency to decide . . . how
to account for cost.” Ante , at 14. That judges might have
made different regulatory choices—might have considered costs in
different ways at different times—will not suffice to overturn
EPA’s action where Congress, as here, chose not to speak directly
to those matters, but to leave them to the Agency to decide.

															All of that means our decision here properly
rests on something the majority thinks irrelevant: an understanding
of the full regulatory process relating to power plants and of
EPA’s reasons for considering costs only after making its initial
“appropriate and necessary” finding. I therefore turn to those
issues, to demonstrate the simple point that should resolve these
cases: that EPA, in regulating power plants’ emissions of hazardous
air pollutants, accounted for costs in a reasonable way.

															II

															A

															In the years after its “appropriate and
necessary” finding, EPA made good on its promise to account for
costs “[a]s a part of developing a regulation.” 65 Fed. Reg. 79830;
see supra , at 7. For more than a decade, as EPA deliberated
on and then set emissions limits, costs came into the calculus at
nearly every turn. Reflecting that consideration, EPA’s final rule
noted that steps taken during the regulatory process had focused on
“flexib[ility] and cost-effective[ness]” and had succeeded in
making “the rule less costly and compliance more readily
manageable.” 77 Fed. Reg. 9306, 9376. And the regulation concluded
that “the benefits of th[e] rule” to public health and the
environment “far outweigh the costs.” Id. , at 9306.

															Consistent with the statutory framework, EPA
initially calculated floor standards: emissions levels of the
best-performing 12% of power plants in a given category or
subcategory. The majority misperceives this part of the rulemaking
process. It insists that EPA “must promulgate certain
. . . floor standards no matter the cost.” Ante ,
at 11. But that ignores two crucial features of the top-12% limits:
first, the way in which any such standard intrinsically accounts
for costs, and second, the way in which the Agency’s categorization
decisions yield different standards for plants with different cost
structures.

															The initial point is a fact of life in a market
economy: Costs necessarily play a role in any standard that uses
power plants’ existing emissions levels as a benchmark. After all,
the best-performing 12% of power plants must have considered costs
in arriving at their emissions outputs; that is how profit-seeking
enterprises make decisions. And in doing so, they must have
selected achievable levels; else, they would have gone out of
business. (The same would be true even if other regulations
influenced some of those choices, as the majority casually
speculates. See ante , at 13.) Indeed, this automatic
accounting for costs is why Congress adopted a market-leader-based
standard. As the Senate Report accompanying the 1990 amendments
explained: “Cost considerations are reflected in the selection of
emissions limitations which have been achieved in practice (rather
than those which are merely theoretical) by sources of a similar
type or character.” S. Rep. No. 101–228, pp. 168–169 (1989).
Of course, such a standard remains technology-forcing: It requires
laggards in the industry to catch up with frontrunners, sometimes
at significant expense. But the benchmark is, by definition, one
that some power plants have achieved economically. And when EPA
made its “appropriate and necessary” finding, it knew that
fact—knew that the consequence of doing so was to generate floor
standards with cost considerations baked right in.

															Still more, EPA recognized that in making
categorization decisions, it could take account of multiple factors
related to costs of compliance—and so avoid impracticable
regulatory burdens. Suppose, to use a simple example, that curbing
emissions is more technologically difficult—and therefore more
costly—for plants burning coal than for plants burning oil. EPA can
then place those two types of plants in different categories, so
that coal plants need only match other coal plants rather than
having to incur the added costs of meeting the top oil plants’
levels. Now multiply and complexify that example many times over.
As the Agency noted when making its “appropriate and necessary”
finding, EPA “build[s] flexibility” into the regulatory regime by
“bas[ing] subcategorization on . . . the size of a
facility; the type of fuel used at the facility; and the plant
type,” and also “may consider other relevant factors such as
geographic conditions.” 65 Fed. Reg. 79830; see S. Rep. No.
101–228, at 166 (listing similar factors and noting that “[t]he
proper definition of categories . . . will assure maximum
protection of public health and the environment while minimizing
costs imposed on the regulated community”). Using that
classification tool, EPA can ensure that plants have to attain only
the emissions levels previously achieved by peers facing comparable
cost constraints, so as to further protect plants from unrealistic
floor standards.

															And that is exactly what EPA did over the course
of its rulemaking process, insisting on apples-to-apples
comparisons that bring floor standards within reach of diverse
kinds of power plants. Even in making its “appropriate and
necessary” finding, the Agency announced it would divide plants
into the two categories mentioned above: “coal-fired” and
“oil-fired.” 65 Fed. Reg. 79830.[ 3 ] Then, as the rulemaking progressed, EPA went further.
Noting that different technologies significantly affect the ease of
attaining a given emissions level, the Agency’s proposed rule
subdivided those two classes into five: plants designed to burn
high-rank coal; plants designed to burn low-rank virgin coal;
plants that run on a technology termed integrated gasification
combined cycle; liquid oil units; and solid oil units. See 76 Fed.
Reg. 25036–25037. EPA explained that by subcategorizing in that
way, it had spared many plants the need to “retrofit[ ],”
“redesign[ ],” or make other “extensive changes” to their
facilities. Id. , at 25036. And in its final rule, EPA
further refined its groupings in ways that eased compliance. Most
notably, the Agency established a separate subcategory, and
attendant (less stringent) floor, for plants in Hawaii, Puerto
Rico, Guam, and the Virgin Islands on the ground that plants in
those places have “minimal control over the quality of available
fuel[ ] and disproportionately high operational and
maintenance costs.” 77 Fed. Reg. 9401.[ 4 ]

															Even after establishing multiple floor standards
that factored in costs, EPA adopted additional “compliance options”
to “minimize costs” associated with attaining a given floor—just as
its “appropriate and necessary” finding explicitly contemplated. Id. , at 9306; 76 Fed. Reg. 25057; see 65 Fed. Reg. 79830.
For example, the Agency calculated each floor as both an
“input-based” standard (based on emissions per unit of energy used ) and an“output-based” standard (based on emissions per
unit of use-ful energy produced ), and allowed plants to
choose which standard they would meet. That option, EPA explained,
can “result in . . . reduced compliance costs.” 76 Fed.
Reg. 25063. Similarly, EPA allowed plants to meet a given 12% floor
by averaging emissions across all units at the same site, instead
of having to meet the floor at each unit. Some plants, EPA
understood, would find such averaging a “less costly alternative.”
77 Fed. Reg. 9385. Yet again: EPA permitted “limited use”
plants—those primarily burning natural gas but sometimes switching
to oil—to comply with the final rule by meeting qualitative “work
practice standards” rather than numeric emissions limits. Id. , at 9400–9401. EPA explained that it would be
“economically impracticable” for those plants to demonstrate
compliance through emissions testing, and that an alternative
standard, focused on their adoption of pollution control
techniques, would allow them to both reduce emissions and avoid
“extra cost.” Id. , at 9401. And the list goes on. See, e.g. , id. , at 9409–9410 (allowing extra year for
plants to comply with emissions limits where “source-specific
construction, permitting, or labor, procurement or resource
challenges” arise); id. , at 9417 (describing additional
“compliance options”).

															With all that cost-consideration under its belt,
EPA next assessed whether to set beyond-the-floor standards, and
here too, as it knew it would, the Agency took costs into account.
For the vast majority of coal and oil plants, EPA decided that
beyond-the-floor standards would not be “reasonable after
considering costs.” Id. , at 9331. The Agency set such a
standard for only a single kind of plant, and only after
determining that the technology needed to meet the more lenient
limit would also achieve the more stringent one. See id. , at
9393; 76 Fed. Reg. 25046–25047. Otherwise, EPA determined, the
market-leader-based standards were enough.

															Finally, as required by Executive Order and as
anticipated at the time of the “appropriate and necessary” finding,
EPA conducted a formal cost-benefit analysis of its new emissions
standards and incorporated those findings into its proposed and
final rules. See id. , at 25072–25078; 77 Fed. Reg.
9305–9306, 9424–9432. That analysis estimated that the regulation’s
yearly costs would come in at under $10 billion, while its annual
measureable benefits would total many times more—between $37 and
$90 billion. See id. , at 9305–9306; ante , at 4. On
the costs side, EPA acknowledged that plants’ compliance with the
rule would likely cause electricity prices to rise by about 3%, but
projected that those prices would remain lower than they had been
as recently as 2010. See 77 Fed. Reg. 9413–9414. EPA also thought
the rule’s impact on jobs would be about a wash, with jobs lost at
some high-emitting plants but gained both at cleaner plants and in
the pollution control industry. See ibid. On the benefits
side, EPA noted that it could not quantify many of the health gains
that would result from reduced mercury exposure. See id. , at
9306. But even putting those aside, the rule’s annual benefits
would include between 4,200 and 11,000 fewer premature deaths from
respiratory and cardiovascular causes, 3,100 fewer emergency room
visits for asthmatic children, 4,700 fewer non-fatal heart attacks,
and 540,000 fewer days of lost work. See id. , at 9429.

															Those concrete findings matter to these
cases—which, after all, turn on whether EPA reasonably took costs
into account in regulating plants’ emissions of hazardous air
pollutants. The majority insists that it may ignore EPA’s
cost-benefit analysis because “EPA did not rely on” it when issuing
the initial “appropriate and necessary” finding. Ante , at 15
(quoting Solicitor General); see also SEC v. Chenery
Corp. , 318 U. S. 80 –94 (1943). At one level, that
description is true—indeed, a simple function of chronology: The
kick-off finding preceded the cost-benefit analysis by years and so
could not have taken its conclusions into account. But more
fundamentally, the majority’s account is off, because EPA knew when
it made that finding that it would consider costs at every
subsequent stage, culminating in a formal cost-benefit study. And
EPA knew that, absent unusual circumstances, the rule would need to
pass that cost-benefit review in order to issue. See Exec. Order
No. 12866, 58 Fed. Reg. 51736 (“Each agency shall . . .
adopt a regulation only upon a reasoned determination that the
benefits of the intended regulation justify its costs”). The
reasonableness of the Agency’s decision to consider only the harms
of emissions at the threshold stage must be evaluated in that
broader context. And in thinking about that issue, it is well to
remember the outcome here: a rule whose benefits exceed its costs
by three to nine times. In making its “appropriate and necessary”
finding, EPA had committed to assessing and mitigating costs
throughout the rest of its rulemaking; if nothing else, the
findings of the Agency’s cost-benefit analysis—making clear that
the final emissions standards were cost-effective—show that EPA did
just that.

															B

															Suppose you were in charge of designing a
regulatory process. The subject matter—an industry’s emissions of
hazardous material—was highly complex, involving multivarious
factors demanding years of study. Would you necessarily try to do
everything at once? Or might you try to break down this lengthy and
complicated process into discrete stages? And might you consider
different factors, in different ways, at each of those junctures? I
think you might. You know that everything must get done in the
end—every relevant factor considered. But you tend to think that
“in the end” does not mean “in the beginning.” And you structure
your rulemaking process accordingly, starting with a threshold
determination that does not mirror your end-stage analysis. Would
that be at least (which is all it must be) a “reasonable policy
choice”? Chevron , 467 U. S., at 845.

															That is the question presented here, and it
nearly answers itself. Setting emissions levels for hazardous air
pollutants is necessarily a lengthy and complicated process,
demanding analysis of many considerations over many years. Costs
are a key factor in that process: As I have said, sensible
regulation requires careful scrutiny of the burdens that potential
rules impose. See supra , at 6–7. But in ordering its
regulatory process, EPA knew it would have the opportunity to
consider costs in one after another of that rulemaking’s stages—in
setting the level of floor standards, in providing a range of
options for plants to meet them, in deciding whether or where to
require limits beyond the floor, and in finally completing a formal
cost-benefit analysis. See 65 Fed. Reg. 79830–79831; supra ,
at 9–15. Given that context, EPA reasonably decided that it was
“appropriate”—once again, the only statutory requirement relevant
here—to trigger the regulatory process based on the twin findings
that the emissions in question cause profound health and
environmental harms and that available pollution control
technologies can reduce those emissions. By making that decision,
EPA did no more than commit itself to developing a realistic and
cost-effective regulation—a rule that would take account of every
relevant factor, costs and benefits alike. And indeed, particular
features of the statutory scheme here indicate that EPA’s policy
choice was not just a minimally reasonable option but an eminently
reasonable one.

															To start, that decision brought EPA’s regulation
of power plants into sync with its regulation of every other
significant source of hazardous pollutants under the Clean Air Act.
For all those types of sources (totaling over 100), the Act
instructs EPA to make the threshold decision to regulate based
solely on the quantity and effects of pollutants discharged; costs
enter the picture afterward, when the Agency takes up the task of
actually establishing emissions limits. See supra , at 3–4.
Industry after industry, year after year, EPA has followed that
approach to standard-setting, just as Congress contemplated. See, e.g. , 58 Fed. Reg. 49354 (1993) (dry cleaning facilities);
59 Fed. Reg. 64303 (1994) (gasoline distributors); 60 Fed. Reg.
45948 (1995) (aerospace manufacturers). And apparently with
considerable success. At any rate, neither those challenging this
rule nor the Court remotely suggests that these regulatory regimes
have done “significantly more harm than good.” Ante , at 7.
So when making its “appropriate and necessary” finding for power
plants, EPA had good reason to continue in the same vein. See, e.g. , Entergy , 556 U. S., at 236 (opinion of
Breyer, J.) (noting that the reasonableness of an agency’s approach
to considering costs rests in part on whether that tack has met
“with apparent success in the past”). And that is exactly how EPA
explained its choice. Stating that it would consider the “costs of
controls” when “developing a regulation,” the Agency noted that
such an “approach has helped build flexibility in meeting
environmental objectives in the past,” thereby preventing the
imposition of disproportionate costs. 65 Fed. Reg. 79830. Indeed,
as EPA further commented in issuing its rule, it would seem
“inequitable to impose a regulatory regime on every industry in
Amer-ica and then to exempt one category” after finding it
repre-sented “a significant part of the air toxics problem.” 77
Fed. Reg. 9322 (quoting 136 Cong. Rec. 36062 (1990) (statement of
Sen. Durenberger)).

															The majority’s attempt to answer this point
founders on even its own statement of facts. The majority objects
that “the whole point of having a separate provision about power
plants” is to “treat[ ] power plants differently from
other stationary sources.” Ante , at 11 (emphasis in
original). But turn back about 10 pages, and read what the majority
says about why Congress treated power plants differently:
because, as all parties agree, separate regulatory requirements
involving acid rain “were expected to have the collateral effect of
reducing power plants’ emissions of hazardous air pollutants,
although the extent of the reduction was unclear.” Ante , at
2; see supra , at 4–5. For that reason alone (the majority
does not offer any other), Congress diverted EPA from its usual
regulatory path, instructing the Agency, as a preliminary matter,
to complete and consider a study about the residual harms to public
health arising from those emissions. See ante , at 2–3; supra , at 5. But once EPA found in its study that the acid
rain provisions would not significantly affect power plants’
emissions of hazardous pollutants, any rationale for treating power
plants differently from other sources discharging the same
substances went up in smoke. See 65 Fed. Reg. 79830. At that point,
the Agency would have had far more explaining to do if, rather than
following a well-tested model, it had devised a new scheme of
regulation for power plants only.

															Still more, EPA could not have accurately
assessed costs at the time of its “appropriate and necessary”
finding. See 8 Mercury Study, at 6–2 (noting the “many
uncertainties” in any early-stage analysis of pollution control
costs). Under the statutory scheme, that finding comes before—years
before—the Agency designs emissions standards. And until EPA knows
what standards it will establish, it cannot know what costs they
will impose. Nor can those standards even be reasonably
guesstimated at such an early stage. Consider what it takes to set
floor standards alone. First, EPA must divide power plants into
categories and subcategories; as explained earlier, those
classification decisions significantly affect what floors are
established. See supra , at 4, and n. 1, 11–12. And
then, EPA must figure out the average emissions level already
achieved by the top 12% in each class so as to set the new
standards. None of that can realistically be accomplished in
advance of the Agency’s regulatory process: Indeed, those steps are
the very stuff of the rulemaking. Simi-larly, until EPA knows what
“compliance options” it will develop, it cannot know how they will
mitigate the costs plants must incur to meet the floor standards.
See supra , at 13–14. And again, deciding on those options
takes substantial time. So there is good reason for different
considerations to go into the threshold finding than into the final
rule. Simply put, calculating costs before starting to write a
regulation would put the cart before the horse.

															III

															The central flaw of the majority opinion is
that it ignores everything but one thing EPA did. It forgets that
EPA’s “appropriate and necessary” finding was only a first step
which got the rest of the regulatory process rolling. It narrows
its field of vision to that finding in isolation, with barely a
glance at all the ways in which EPA later took costs into account.
See supra , at 10–11 (in establishing floor standards); supra , at 13–14 (in adopting compliance options); supra , at 14 (in deciding whether to regulate beyond the
floor); supra , at 14–15 (in conducting a formal cost-benefit
analysis as a final check). In sum, the major-ity disregards how
consideration of costs infused the regulatory process, resulting
not only in EPA’s adoption of mitigation measures, ante , at
13–14, but also in EPA’s crafting of emissions standards that
succeed in producing benefits many times their price.

															That mistake accounts for the majority’s primary
argument that the word “appropriate,” as used in §7412(n)(1)(A),
demands consideration of costs. See ante , at 6–7. As I have
noted, that would be true if the “appropriate and necessary”
finding were the only step before imposing regulations on power
plants. See supra , at 6–7. But, as should be more than clear
by now, it was just the first of many: Under the Clean Air Act, a
long road lay ahead in which the Agency would have more—and far
better—opportunities to evaluate the costs of diverse emissions
standards on power plants, just as it did on all other sources. See supra , at 4, 7, 9–15. EPA well understood that fact: “We
evaluate the terms ‘appropriate’ and ‘necessary,’ ” it
explained, in light of their “statutory context.” 76 Fed. Reg.
24986. And EPA structured its regulatory process accordingly, with
consideration of costs coming (multiple times) after the threshold
finding. The only way the majority can cast that choice as
unreasonable, given the deference this Court owes to such agency
decisions, is to blind itself to the broader rulemaking scheme.

															The same fault inheres in the majority’s
secondary argument that EPA engaged in an “interpretive
gerrymander[ ]” by considering environmental effects but not
costs in making its “appropriate and necessary” finding. Ante , at 8–9. The majority notes—quite rightly—that Congress
called for EPA to examine both subjects in a study of mercury
emissions from all sources (separate from the study relating to
power plants’ emissions alone). See ante , at 8. And the
majority states—again, rightly—that Congress’s demand for that
study “provides direct evidence that Congress was concerned with
[both] environmental effects [and] cost.” Ante , at 9
(internal quotation marks omitted). But nothing follows from that
fact, because EPA too was concerned with both. True enough, EPA
assessed the two at different times: environmental harms (along
with health harms) at the threshold, costs afterward. But that was
for the very reasons earlier described: because EPA wanted to treat
power plants like other sources and because it thought harms, but
not costs, could be accurately measured at that early stage. See supra , at 17–20. Congress’s simple request for a study of
mercury emissions in no way conflicts with that choice of when and
how to consider both harms and costs. Once more, the majority
perceives a conflict only because it takes so partial a view of the
regulatory process.

															And the identical blind spot causes the
majority’s sports-car metaphor to run off the road. The majority
likens EPA to a hypothetical driver who decides that “it is
‘appropriate’ to buy a Ferrari without thinking about cost, because
he plans to think about cost later when deciding whether to upgrade
the sound system.” Ante , at 11. The comparison is witty but
wholly inapt. To begin with, emissions limits are not a luxury
good: They are a safety measure, designed to curtail the
significant health and environmental harms caused by power plants
spewing hazardous pollutants. And more: EPA knows from past
experience and expertise alike that it will have the opportunity to
purchase that good in a cost-effective way. A better analogy might
be to a car owner who decides without first checking prices that it
is “appropriate and necessary” to replace her worn-out brake-pads,
aware from prior experience that she has ample time to
comparison-shop and bring that purchase within her budget. Faced
with a serious hazard and an available remedy, EPA moved forward
like that sensible car owner, with a promise that it would, and
well-grounded confidence that it could, take costs into account
down the line.

															That about does it for the majority’s opinion,
save for its final appeal to Chenery —and Chenery cannot save its holding. See ante , at 14. Of course a court
may not uphold agency action on grounds different from those the
agency gave. See Chenery , 318 U. S., at 87. But
equally, a court may not strike down agency action without
considering the reasons the agency gave. Id. , at 95. And
that is what the majority does. Indeed, it is difficult to know
what agency document the majority is reading. It denies that “EPA
said . . . that cost-benefit analysis would be deferred
until later.” Ante , at 13. But EPA said exactly that: The
“costs of controls,” the Agency promised, “will be examined” as “a
part of developing a regulation.” 65 Fed. Reg. 79830. Tellingly,
these words appear nowhere in the majority’s opinion. But what are
they other than a statement that cost concerns, contra the
majority, are not “irrelevant,” ante , at 13 (without
citation)—that they are simply going to come in later?

															And for good measure, EPA added still extra
explanation. In its “appropriate and necessary” finding, the Agency
committed to exploring “least-cost solutions” in “devel-oping a
standard for utilities.” 65 Fed. Reg. 79830. The Agency explained
that such an approach—particularly mentioning the use of averaging
and subcategorization—had offered “opportunit[ies] for lower cost
solutions” and “helped build flexibility in meeting environmental
objectives in the past.” Ibid. ; see supra , at 7,
18 . Then, in issuing its proposed and final rules, EPA
affirmed that it had done just what it said. EPA recognized that
standard-setting must “allow the industry to make practical
investment decisions that minimize costs.” 76 Fed. Reg. 25057.
Accordingly, the Agency said, it had “provid[ed] flexibility and
compliance options” so as to make the rule “less costly” for
regulated parties. 77 Fed. Reg. 9306. EPA added that it had
rejected beyond-the-floor standards for almost all power plants
because they would not be “reasonable after considering costs.” Id. , at 9331. And it showed the results of a formal analysis
finding that the rule’s costs paled in comparison to its benefits.
In sum, EPA concluded, it had made the final standards
“cost-efficient.” Id. , at 9434. What more would the majority
have EPA say?

															IV

															Costs matter in regulation. But when Congress
does not say how to take costs into account, agencies have broad
discretion to make that judgment. Accord, ante , at 14
(noting that it is “up to the Agency to decide (as always, within
the limits of reasonable interpretation) how to account for cost”).
Far more than courts, agencies have the expertise and experience
necessary to design regula-tory processes suited to “a technical
and complex arena.” Chevron , 467 U. S., at 863. And in
any event, Congress has entrusted such matters to them, not to
us.

															EPA exercised that authority reasonably and
responsibly in setting emissions standards for power plants. The
Agency treated those plants just as it had more than 100 other
industrial sources of hazardous air pollutants, at Congress’s
direction and with significant success. It made a threshold finding
that regulation was “appropriate and necessary” based on the harm
caused by power plants’ emissions and the availability of
technology to reduce them. In making that finding, EPA knew that
when it decided what a regulation would look like—what emissions
standards the rule would actually set—the Agency would consider
costs. Indeed, EPA expressly promised to do so. And it fulfilled
that promise. The Agency took account of costs in setting floor
standards as well as in thinking about beyond-the-floor standards.
It used its full kit of tools to minimize the expense of complying
with its proposed emissions limits. It capped the regulatory
proc-ess with a formal analysis demonstrating that the bene-fits of
its rule would exceed the costs many times over. In sum, EPA
considered costs all over the regulatory process, except in making
its threshold finding—when it could not have measured them
accurately anyway. That approach is wholly consonant with the
statutory scheme. Its adoption was “up to the Agency to decide.” Ante , at 14.

															The majority arrives at a different conclusion
only by disregarding most of EPA’s regulatory process. It insists
that EPA must consider costs—when EPA did just that, over and over
and over again. It concedes the importance of “context” in
determining what the “appropriate and necessary” standard means,
see ante , at 7, 10—and then ignores every aspect of the
rulemaking context in which that standard plays a part. The result
is a decision that deprives the Agency of the latitude Congress
gave it to design an emissions-setting process sensibly accounting
for costs and benefits alike. And the result is a decision that
deprives the American public of the pollution control measures that
the responsible Agency, acting well within its delegated authority,
found would save many, many lives. I respectfully dissent. Notes 1 Consider it this way:
Floor standards equal the top 12% of something, but until you know
the something, you can’t know what it will take to attain that
level. To take a prosaic example, the strongest 12% of NFL players
can lift a lot more weight than the strongest 12% of human beings
generally. To match the former, you will have to spend many more
hours in the gym than to match the latter—and you will probably
still come up short. So everything depends on the comparison
group. 2 EPA reaffirmed its
“appropriate and necessary” finding in 2011 and 2012 when it issued
a proposed rule and a final rule. See 76 Fed. Reg. 24980 (2011)
(“The Agency’s appropriate and necessary finding was correct in
2000, and it remains correct today”); accord, 77 Fed. Reg.
9310–9311 (2012). 3 EPA also determined at
that stage that it is “not appropriate or necessary” to regulate
natural gas plants’ emissions of hazardous air pollutants because
they have only “negligible” impacts. 65 Fed. Reg. 79831. That
decision meant that other plants would not have to match their
cleaner natural gas counterparts, thus making the floor standards
EPA established that much less costly to achieve. 4 The majority insists on
disregarding how EPA’s categorization decisions made floor
standards less costly for various power plants to achieve, citing
the Agency’s statement that “it is not appropriate to premise
subcategorization on costs.” 77 Fed. Reg. 9395 (quoted ante ,
at 13). But that misunderstands EPA’s point. It is quite true that
EPA did not consider costs separate and apart from all other
factors in crafting categories and subcategories. See S. Rep.
No. 101–128, p. 166 (1989) (noting that EPA may not make
classifications decisions “based wholly on economic grounds”); 77
Fed. Reg. 9395 (citing Senate Report). That approach could have
subverted the statutory scheme: To use an extreme example, it would
have allowed EPA, citing costs of compliance, to place the top few
plants in one category, the next few in another category, the third
in a third, and all the way down the line, thereby insulating every
plant from having to make an appreciable effort to catch up with
cleaner facilities. But in setting up categories and subcategories,
EPA did consider technological, geographic, and other factors
directly relevant to the costs that diverse power plants would bear
in trying to attain a given emissions level. (For some reason, the
majority calls this a “carefully worded observation,” ante ,
at 13, but it is nothing other than the fact of the matter.) The
Agency’s categorization decisions (among several other measures,
see supra , at 10–11; infra this page and 14) thus
refute the majority’s suggestion, see ante , at 11, that the
“appropriate and necessary” finding automatically generates floor
standards with no relation to cost. To the contrary, the Agency
used its categorization authority to establish different floor
standards for different types of plants with different cost
structures.