Ozone Regulation and Real-World Impacts

Mark Green
Posted March 17, 2015

The job that could be lost could be yours, or the job that doesn’t materialize could be the one you had your heart set on. Both scenarios could result from lower federal standards on ground-level ozone, which EPA has proposed and is expected to finalize later this year.

A NERA Economic Consulting study lays out the big-picture impacts -- that a stricter ozone regulation could reduce U.S. GDP by $270 billion per year and $3.4 trillion from 2017 to 2040, resulting in 2.9 million fewer jobs or job equivalents per year on average through 2040.

Big numbers, but abstract. Embedded in them are potential real-world impacts for lots of Americans in terms of economic opportunity lost or denied, illustrated here on a state-by-state basis. These include businesses that might not be launched or expanded, infrastructure plans that could be shelved, such as roads and bridges. It could entail activities that communities might restrict as they try to comply with stricter ozone standards.  Howard Feldman, API senior director of regulatory and scientific affairs:

“These standards are pervasive, they will go down and impact all sorts of manufacturing across the country. … This goes down to consumers. In California they have rules that regulate barbeques. All over the country this is what we’re talking about seeing: very tight rules. People don’t understand this because it’s indirect and it’s not in front of you right now. But these are projected to be … the most costly standards ever set.”

Feldman talked about EPA’s ozone proposal during a conference call with reporters on the eve of the deadline for submitting official comments to the agency. API’s comments, he said, center on a few key points:

• Why the need for stricter standards when EPA data shows ground-level ozone in the U.S. declined 18 percent between 2000 and 2013 under existing standards that aren’t even fully implemented yet? EPA’s chart:

• Why are stricter standards needed when current standards already are protecting public health,  confirmed by peer-reviewed science?
• Why is EPA proposing standards that can’t be achieved because of background ozone levels – standards that would be lower than naturally occurring levels of ozone, potentially putting pristine places like national parks out of attainment?

Feldman said with a standard of 65 parts per billion (ppb), 45 out of the lower 48 states would have areas that could be out of compliance. At 60 ppb, 46 out of the lower 48 states could have areas out of compliance. Feldman:

“The fact is, as proposed, the new standards could impose unachievable emission reduction requirements on virtually every part of the nation, including rural and undeveloped areas. Even pristine areas with no industrial activity such as national parks could be out of attainment. In fact, the new standard seeks to achieve ozone levels that approach or are even lower than naturally occurring levels, in some areas, which could effectively prohibit new economic activity. States would have to place new restrictions on businesses of all sizes and add additional bureaucratic red tape to the permitting process for public works projects. These new rules could prevent communities from improving their infrastructure such as highways or waste treatment facilities.”

More Feldman:

“We think these standards, in and of themselves, should be held back and the administration should not do this. We think that the science is not compelling, the public health is already protected … So in and of itself these standards should not move forward. … There’s an adverse health impact from the impact of the cost of this regulation – the cost and financial impacts of this also has an adverse health impact that EPA needs to consider as well.”

There’s another way. The administration, as did once before, could pull the proposal back. It could give the states time to fully implement current standards – standards that are working. Feldman:

“We urge the administration to keep the current standards, which are not only the strictest standards ever imposed – they have yet to be fully implemented. Fundamentally, we question the wisdom and the motivation behind burdening our nation’s still recovering economy and the American consumer with more, costly regulations before the current regulations have been given time to work. The truth is this rule could be the costliest regulation ever imposed on the American public. A lower standard could, for little or no health benefit, significantly constraint our nation’s economy and eliminate thousands of jobs.”