How EPA’s Ozone Proposal Threatens Jobs and Growth
A revised standard will be largely unattainable, but its heavy costs will ripple through the economy.
There's an important issue coming your way that could damage your ability to deliver jobs and growth to the citizens of your state, county or city. The Environmental Protection Agency (EPA) is about to set a new standard lowering acceptable levels of ground-level ozone. A lower ozone standard would threaten economic activity across the country without significantly improving the environment or human health.
As a major component of smog, ground-level ozone can pose a health risk. While naturally occurring, it also forms from a mix of industrial emissions. The good news is that, according to the EPA, ozone levels have dropped by 33 percent since 1980. Businesses, governments and individuals all have played key roles in this success. Market-driven innovations and policies to improve fuel economy, increase energy efficiency and reduce emissions from stationary and mobile sources have delivered real results.
The EPA's new ozone standard has the potential to turn this success story into an economic tragedy. If it moves forward with lowering the standard, the EPA will essentially be requiring many states and local communities to reduce ground-level ozone to a level that is either unattainable or technologically infeasible given existing emissions-control technologies. Moreover, the new rule, which the EPA could finalize as early as this September, is expected to be among the most expensive regulations in U.S. history.
Let's run down some of the facts. First, under the EPA's proposal the national ozone standard would drop from the current 75 parts per billion to somewhere between 70 and 65 ppb. Many regions of the country that meet the current standard would suddenly find themselves at risk of being cast out of attainment. These areas, where millions of Americans live, include large swaths of the Intermountain West, the Gulf Coast, the Upper Midwest and the Atlantic Seaboard.
Second, a new lower standard would approach background ozone levels -- ozone that is not the result of human activity in North America -- in certain areas of the country, including much of the Intermountain West. Despite having no control over background levels, regions of the country that fail to meet the new standard would find themselves thrown into economic "dead zones." Falling out of attainment with the new standard will lead to real economic damage. Restrictions on new construction and business expansion could be severe.
According to a study by Michael Greenstone, former chief economist with President Obama's Council of Economic Advisors, a non-attainment designation results in a 4.8 percent productivity "penalty" for regulated sectors. Another study, by W. Reed Walker of the University of California, found that the earnings of the average worker in regulated sectors declined by 20 percent after a non-attainment designation. Nearly all of this loss is attributable to workers leaving their firms.
More than 120 million Americans, many in California and the Northeast, live in areas that have not even attained the current ozone standard, which was established in 2008 and only recently implemented. For some of these areas, the technologies needed to comply simply do not exist. That's why Business Roundtable and others are urging President Obama to reconsider this rule change and to focus more efforts on helping these areas meet the current standard before ratcheting it down even further.
We have put information about the ozone success story and how the EPA's rule goes too far online at businessroundtable.org/ozone. We urge you to take a look at the maps that show which counties don't meet the current standard -- and are already paying the price for non-attainment -- and which are likely to move into non-attainment under a new standard.
There is one direct way you can weigh in on this issue: Reach out to the White House to ask the administration to reconsider this rule before it's too late. Your members of Congress need to hear from you as well so that they can share their views with the president. The clock is ticking.