EPA: New Clean Air Standards to Cost $46 Billion Annually

EPA: New Clean Air Standards to Cost $46 Billion Annually
January 1, 1998



Less than six months after President Clinton endorsed stringent new air quality standards for particulate matter (PM) and ground-level ozone, the Environmental Protection Agency has been forced to increase five-fold its original projections of the measure’s cost.

In addition, the enormous burden the new standards will place on local governments around the country may nullify any public health benefits promised by EPA’s initiative.

EPA’s initial claim--that the cost of the new standards would not exceed $8.5 billion--was met by dire predictions from a host of public and private entities that the final tab would be far higher. EPA has since been forced to acknowledge that its critics were closer to the mark. The agency now says tightening ozone and PM standards will cost $46 billion. The five-fold increase in the agency’s cost estimate was not revealed until after the President had approved the standards, fueling allegations that EPA did not deal honestly with the public during the debate over its air quality initiative.

It has become clear that EPA’s original estimate was artificially low because it assumed only partial compliance with the new standards. The agency recognized that the new standards were so stringent that compliance with them would be impossible in counties classified as “residual non-attainment areas” (RNAs). The agency now finds that there are 47 such RNAs for ozone and PM combined. Those counties will be unable to achieve the current standards for ozone and PM, much less the new standards, by 2010. Moreover, no technology is currently available that would allow those counties to come into compliance with even the current standards in the foreseeable future.

What’s more, EPA now admits that the extraordinary costs of complying with its new standards may very well overshadow the public health benefits so prominently trumpeted by Administrator Carol Browner.

In its Regulatory Impact Analysis (RIA), EPA now says the net benefits from its new PM standard range from a negative $18 billion to a positive $67 billion. For ground-level ozone, the situation is even worse. The agency projects that the new standard will have net negative benefits of $1.1 billion to $8.1 billion annually.

Evaluating the new standards’ impact on public health more broadly, EPA’s initiative could have devastating unintended consequences. “Due to ozone’s screening of harmful ultraviolet-B (UV-B) radiation,” note Wendy Gramm and Susan Dudley, “the change in the ozone standard will increase malignant and non-melanoma skin cancers and cataracts, as well as other UV-B-related health effects.”

Gramm and Dudley further point out that EPA’s claim that asthma sufferers will benefit from the new standards is highly questionable. “Recent studies suggest that poverty may be a more important risk factor for asthma than air quality, so the huge costs of this rule may well increase the very disease it is purportedly targeted at improving,” they write.