The proposed construction of six new coal-fired power plants in Montana has citizens rightly concerned about the human and ecological risks posed by the mercury emissions of these new plants. Like all environmental issues, this one is scientifically complex and highly emotional. And unfortunately, there are no perfect solutions. Much of the problem is beyond our control. Here are some of the challenges faced by state regulators.

Mercury is a naturally occurring element. It’s found in rocks, soils, oceans, and our atmosphere. Volcanoes and forest fires release it into the environment. However, burning coal is responsible for the vast majority of human-caused emissions. But even if we burned no coal, fish would still contain some mercury from ocean water.

After mercury falls to ground or sea, some of it is transformed into methylmercury. (Methylmercury itself is not emitted by power plants.) Soluble in water, methylmercury moves up the food chain, accumulating in the fat cells of fish. As a result, pregnant and nursing mothers who eat large amounts of fish and seafood risk exposing their children to mercury poisoning.

High doses of mercury adversely affect brain and nervous system development. The phrase “mad as a hatter” didn’t arise by accident; mercuric nitrate was used to make felt for hats. In the 1950s we witnessed one of the world’s worst cases of mercury pollution, as discharges into Minimata Bay, Japan contaminated fish. The children of women who consumed them suffered horribly. Fortunately, this scale of contamination is behind us. The U.S. has reduced mercury emissions by 80 to 90 percent since the early 1980s, due mainly to a near elimination of mercury emissions from waste incineration and from production leaks when processing ores containing mercury.

Further, mercury is a global pollutant. The EPA estimates that more than one-half of the mercury deposited in the U.S. comes from outside sources, e.g., China. This source of emissions will surely increase as China builds coal-fired power plants to meet growing electricity demands. Any attempt to reduce Montana’s mercury levels will require international as well as local action.

The EPA has proposed a cap-and-trade system to reduce total mercury emissions. Here’s how it works. The EPA will determine the total amount of mercury that can be safely put into the environment by Americans. Companies are then given emission credits, allowing them to emit a specific amount of mercury. Companies that emit beyond their allowances must buy credits from those who emit less.

This approach has been successfully used to get lead out of gasoline, reduce ozone-damaging CFCs, and to dramatically (and relatively inexpensively) reduce sulfur dioxide and nitrogen oxide emissions, the primary causes of acid rain.

Emissions trading is often a preferable alternative to a command-and-control approach, i.e., one that mandates use of a particular technology. Economists champion emissions trading because it is more affordable to consumers, spurs innovation, and achieves greater environmental quality at a lower cost. This is important, for the cost savings from emissions trading make it possible to achieve other desirable environmental goals. A cap-and-trade system also provides sources the flexibility to reduce emissions based on local knowledge and circumstance.

Many cap-and-trade systems have another big advantage -- they allow environmental and citizens’ groups to buy and retire emission credits.

Under a tradable permit plan, total mercury emissions would surely decline. But the reductions will vary by location and the potential for local “hot spots” will remain. This may be a serious health risk that warrants strict limitations despite higher costs.

If we take a command-and-control approach and require all new coal-fired power plants to strictly limit their mercury emissions, energy consumers will pick up the tab in the form of higher electricity prices. But shouldn’t consumers face the full cost of their choices?

When at all possible, sound public policy should assure that individual benefits account for any social costs they generate. (Think of the perverse incentives of the federal flood insurance program.) But remember that people spend a portion of increased income on risk-reducing measures such as additional medical care and safer cars and homes. When considering Montana’s approach to mercury, state regulators will find only trade-offs.