GRAY: Reducing ozone could kill jobs

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ANALYSIS/OPINION:

The Obama White House is facing increasing criticism for being anti-business at a time when job creation is more important than it has been since the 1930s. But it is also proposing policies with one hand that will directly destroy the jobs they are purporting to create on the other hand.

Take, for example, President Obama’s acknowledgment there are no “shovel ready” jobs available even as he is pushing new infrastructure projects. He should not be surprised because his Environmental Protection Agency is pursuing regulations that will all but halt these kinds of projects.

The most egregious example is the White House’s plan to lower the ozone standard and put virtually the entire country into what is technically called “nonattainment.” Now, it is probable that few people will have ever heard of ozone or nonattainment. But since this seemingly obscure issue can have enormous impact, a little background is necessary.

Ozone is a pollutant caused primarily by vehicles and power plants. We don’t hear much about it today because it has been so dramatically reduced over the past 30 years that it no longer poses a significant health risk. Cars, for example, are 98 percent cleaner with respect to ozone than they were 30 years ago. Ozone today is nearly down to what is known as “background” levels — that is, levels caused by natural sources such as trees and other vegetation (yes, Ronald Reagan was correct when he said that trees pollute).

The ozone standard, like the other national standards, is reviewed every five years. The current ozone standard is up for review next year as part of this review process. Notwithstanding the review cycle and the very low levels that now exist, the White House is planning to lower the standard before the review cycle starts — to what are effectively background levels.

If there were some sort of emergency to justify breaking the normal review, the move might make sense. But there is no reason to do anything. EPA itself says the benefits of the new proposal are “highly uncertain,” while at the same time acknowledging that the costs will be in the billions and there is no known technology to achieve many of the reductions necessary to meet the new standard. Most of the benefits are, in any event, reductions from parallel program that would materialize without the ozone rule.

The consequences of the move will be to classify most of the country as nonattainment — including such pristine areas as Yosemite National Park. This means that virtually any proposal to build a new plant or make renovations of existing plants or take any other action that could increase pollution at a particular location (even if it would lower pollution by a larger amount elsewhere) will be held up to determine what pollution controls will be necessary. Even if the project will not be stopped, it will be delayed — and made more expensive.

Subjecting construction work on new and existing facilities to lengthy permitting delays is not the only penalty of nonattainment. There is also the problem of highway repair and construction if a state cannot prepare a plan that will achieve attainment. In that event — a most likely possibility across the country because attainment will be exceedingly difficult to achieve — the law prohibits use of federal highway funds, thus precluding the very projects the White House is hoping to fund. The prohibition is not immediate, but the adverse impact on planning will be.

It is for these reasons that North Carolina has officially objected even before the official announcement of the EPA proposal. There will be many other objections from many sources (except the lawyers who will have to be hired to argue over every construction project).

Is there any way to stop this job-killing idea, at least until we are out of the current recession? The courts are a possibility. The Supreme Court held just a few years ago in a case involving the same pollutant that EPA cannot require more emission reductions than are “necessary” to protect public health from “significant risks.” It is all but impossible to imagine a court finding that providing a “highly uncertain” benefit is either “necessary” to protect public health or addresses a significant risk. This is especially true where EPA admits that most of the uncertain benefits are expected to result in any event from other pollution reduction programs.

Winning in the courts does not involving showing that costs exceed benefits; it is settled that EPA cannot consider cost-benefit balancing in setting national standards. The judicial argument is simply that any “highly uncertain” benefit is by definition unnecessary. But EPA will be ultimately held accountable politically for the costs it imposes.

It is also possible that the White House will think better of the proposal before implementing it. After all, the action will really start to cost jobs just in time for the 2012 election season — and, as Samuel Johnson once said, there is nothing like a hanging to concentrate the mind.

C. Boyden Gray served as White House Counsel in administration of President George H.W. Bush.

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