EPA Announced Environmental Regulation To Decrease Ozone Pollution

NY Times: The Regulation Will Curb Smog-Forming Ozone Emissions From Power Plants And Factories. The Environmental Protection Agency (EPA) announced on November 25 that it would lower the emission standard for ground level ozone, commonly known as smog. According to a New York Times article outlining the regulations, the EPA's proposed rule would “lower the current threshold for ozone pollution to a range of 65 to 70 parts per billion, from 75 parts per billion”:

The Obama administration on Wednesday announced a long-delayed environmental regulation to curb emissions of ozone, a smog-causing pollutant linked to asthma, heart disease and premature death.

The sweeping regulation, which are aimed at smog caused by power plants and factories across the country, particularly in the Midwest, is the latest in a series of Environmental Protection Agency controls on air pollution that wafts from smokestacks and tailpipes. Such regulations, released under the authority of the Clean Air Act, have become a hallmark of President Obama's administration.

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The proposed regulation would lower the current threshold for ozone pollution to a range of 65 to 70 parts per billion, from 75 parts per billion. That range is less stringent than the standard of 60 parts per billion sought by environmental groups, but the E.P.A. proposal would also seek public comment on a 60 parts-per-billion plan, keeping open the possibility that the final rule could be stricter. [The New York Times, 11/26/14]

Las Vegas Review-Journal Claims EPA Regulations Would Be Too Costly

Las Vegas Review-Journal: New EPA Ozone Regulation “Will Actually Do More Harm Than Good.” A Las Vegas Review-Journal editorial from December 4 claimed that out of all the proposed rules in the recently released agenda by the Obama administration, the EPA rule regulating ozone pollution will be the “costliest.”  The editorial continued:

Environmentalists and public health professionals tout the regulation's positive impact on air quality, but it will actually do more harm than good. American air quality already is improving under existing regulations, but the new rules will force the owners of power plants and factories to install expensive technologies that will drive up electricity prices, kill jobs and, ultimately, deal a fatal blow to the coal industry.

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The Obama administration claims to be champions of working families and the middle class, but the regulations on ozone levels, in particular -- and almost all of its regulations, in general -- are job killers. How, exactly, does killing jobs help the middle class? [Las Vegas Review-Journal, 12/4/14]

Cost Analysis By EPA Shows Positive Economic Benefit By 2025

EPA Analysis: Ozone Regulations Would Provide Net Economic Benefit Of Up To $23 Billion By 2025. The EPA conducted a cost-benefit analysis, based on scientific research, on the potential impacts from the regulation and found that the regulations would likely result in net economic benefits due to reduced mortality rates and work loss days, and increased health and welfare. They concluded that lowering the standard from its current level at 75 parts per billion (ppb) to 70 ppb would provide a net economic benefit of $2.5 to $9.1 billion and lowering it to 65 ppb would provide a net economic benefit of $4 to $23 billion:

[EPA.gov, Regulatory Impact Analysis, November 2014]

EPA Administrator: Rule Could Bring $3 In Health Benefits For Every Dollar Spent. EPA Administrator Gina McCarthy summarized the benefits of the regulation in an op-ed published for CNN Money:        

The good news is that if these proposed standards were finalized, every dollar we would invest to meet them would return up to $3 in health benefits (totaling up to $38 billion in 2025, and going up from there).

For our children, that means avoiding up to 1 million missed school days, thousands of cases of acute bronchitis, and nearly a million asthma attacks. Adults could avoid hundreds of emergency room visits for cardiovascular reasons, up to 180,000 missed work days, and 4 million days where people have to deal with pollution-related symptoms.  [CNN Money, 11/26/14]

NBER: Decrease In Ozone Concentrations Increases Worker Productivity, Saves $1.1 Billion In Labor Expenditure. According to a working paper by economists Joshua Graff Zivin and Matthew Neidell for the National Bureau of Economic Research, the ozone standard could be viewed as “a tool for promoting economic growth” due to increased worker productivity. They concluded that a “10 ppb decrease in ozone concentrations increases worker productivity by 4.2 percent” which “would translate into an annual cost savings of approximately $1.1 billion in labor expenditure.” [National Bureau of Economic Research, April 2011]

Previous Estimates Of The Cost Of EPA Regulations Have Been Overestimated

Resources For The Future: EPA Tends To “Overestimate The Total Costs Of Regulations.” An analysis by Resources for the Future (RFF) found that the EPA tends to overestimate its cost estimates of regulations, likely due to the industry studies it cites. RFF found that the EPA overestimated 14 of the 17 regulations it examined:

Of the rules initially examined, 14 projected inflated total costs, while pre-regulation estimates were too low for only 3 rules. These exaggerated adjustment costs are often attributable to underestimates of the potential that technological change could minimize pollution abatement costs.

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Even if regulators are skeptical of industry's estimates, the estimates establish a standard that must be addressed in the rulemaking process. The agency must justify its actions if it rejects the industry numbers; a simple suspicion will not do legally. Thus, the mere existence of industry studies may exert upward pressure on regulators' cost estimates.

 [Resources for the Future, 3/5/10; via Media Matters, 4/1/13]

Center For American Progress: Previous Industry Predictions About Economic Impact Of Similar EPA Regulations Were False. According to an August 2011 analysis by the Center for American Progress of the EPA's ground-level ozone standard as initially set in 1997, industry and business groups' predictions of negative economic consequences at the time were “completely unfounded”:

These [industry and business groups] fears were completely unfounded. CAP examined the economic growth and employment that occurred in the metropolitan areas that were designated as “nonattainment” because they had air pollution levels that exceeded the 1997 ozone standard. (Due to legal challenges by industry, and delays by the Bush administration, these areas were not designated until 2004.) We reviewed the Bureau of Labor Statistics data on the 54 areas that were in nonattainment for the first time under the new 1997 standard, since most of the current complaints focus on areas that will be designated in nonattainment for the first time after the issuance of the new, more protective standard.

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The analysis examined real GDP per capita of the metropolitan statistical areas, or MSAs, with counties designated as nonattainment in 2004 (when the 1997 standard went into effect) and found that while some showed higher or lower GDP growth, overall GDP growth in these MSAs followed the nationwide economic trend, although these areas had larger average per capita GDP to begin with.

A number of new nonattainment areas experienced greater or similar economic growth as the nation did from 2004-2007, including Charlotte, Denver, Las Vegas, Louisville, Phoenix, Raleigh, and San Diego. Meanwhile, areas in states that were suffering from an overall economic decline--such as Michigan and Ohio--generally grew more slowly than the overall economy. [Center for American Progress, 8/18/11]