EPA on Ozone: Leap Before You Look

Mark Green
Posted July 29, 2011

When you think about it, the Environmental Protection Agency is asking an awful lot from the country with its proposed, more restrictive standard on ozone. Underline the word "awful":

• 7.3 million U.S. jobs could be lost by 2020, according to a Manufacturers Alliance (MAPI) study.
• An additional $1 trillion in new regulatory costs per year between 2020 and 2030 again, according to the MAPI study.
• About 85 percent of the country in non-compliance with the new standard, including pristine areas like Yellowstone National Park. More below.

Here's the kicker: EPA has no real idea how the country would get in compliance. In its proposal the agency suggests new technologies will make compliance possible. Sounds like a leap of faith ... off a cliff. Howard Feldman, API's director of regulatory and scientific affairs:

"In its impact analysis, EPA is unable to identify how the nation could comply with the new requirements. It must assume that controls that don't exist today will be available and cost-effective. ... EPA has proposed stringent new standards that are out-of-cycle, not supported by science, and would have devastating economic consequences. It should move forward with the normal five-year review now under way."

Feldman is referring to the fact that under the Clean Air Act, the ozone standard is reviewed every five years. EPA's current proposal is out of cycle, coming two years ahead of schedule. The impacts could be devastating. "This could be EPA's costliest regulation ever," Feldman told reporters. "No rules could be more detrimental to economic growth, and they could not come at a worse time as the nation struggles with an unsteady economic recovery."

The capper is that EPA's proposal would cost more than the benefits the new standard would provide, according to a new study by NERA Economic Consulting. "Using EPA's own estimates ... ozone-related net benefits are negative by billions of dollars per year," writes Dr. Anne E. Smith, the study's author. The agency seems to have tried to mask this with some statistical sleight of hand. Smith:

"The only way EPA finds benefits greater than costs for a tighter ozone standard is to add in health gains from concomitant reductions in (fine particulate matter) that may occur while reducing ozone precursors - 'co-benefits' that have nothing to do with ozone exposures. Thus, EPA's claim that tightening the Ozone (standard) has greater benefits than costs has nothing to do with reducing risks from ozone."

As for Yellowstone Park and other places in America where pollution isn't a problem, they'd still be on EPA's list - from naturally occurring ozone or ozone from other sources that migrates in and is detected by EPA's monitoring stations, rendering Old Faithful, etc., non-compliant.

There's a better idea. EPA can pull its proposal back and fold it into the next regularly scheduled review.