Twice this year, President Obama asked federal agencies to review regulations to ensure that they are not interfering with efforts to rebuild the U.S. economy. In January, he signed an executive order directing agencies to use the “least burdensome tools” that take “into account benefits and cost” and “[promote] economic growth … and job creation.”
Last week, the EPA said it would soon release updated ozone regulations that are going to kill jobs and impose substantial costs on the U.S. economy - at least $90 billion, by its own estimates, and $1 trillion annually between 2020 and 2030 according to industry estimates.
“Good” ozone in the upper atmosphere protects us from ultraviolet radiation, but at ground level it can affect human health and is the main constituent of urban smog. This “bad” ozone comes mostly from vehicle exhaust and industrial emissions, but can also come from natural sources.
The EPA has already missed four self-imposed deadlines (most recently last month) to impose new standards. And environmentalists are not happy about this. Earthjustice and other environmental groups have demanded that the EPA immediately release their rule, stating that the agency “has run out of excuses for any more stalling on this decision.”
But this is hubris. EPA is under no obligation to develop new regulations at this time. The Clean Air Act - the legal basis for most federal air quality regulations - requires the EPA to review national air quality standards every five years. If they find that current thresholds are detrimental to health, the EPA can go through the process of setting a new, scientifically-backed standard. The last time these standards were reviewed was three years ago. Legally, EPA is not obliged to initiate a review for another two years.
So, why is it doing so now? Is smog on the rise? Nope. According to the EPA, ozone levels have been falling year after year. Since 1980, ozone emissions have fallen by nearly 50 percent. And yes, new standards played a significant role in this. But it takes time for companies to develop and implement technologies that will enable them to comply in cost effective ways. Small companies in particular find this difficult because they have fewer resources to use in complying with regulations.
In 1997, the Clinton administration set an eight-hour ozone standard of 84 parts per billion. By 2004, there were still 474 counties that had not achieved that goal. Today, just 242 counties aren’t meeting the standard. In 2008, the Bush administration set an even stricter standard that lowered the ozone level to 75 parts per billion. Small businesses are still in the process of implementing technologies to comply with that ruling. Yet the EPA now wants to ratchet down emissions to between 60 and 70 parts per billion.
At those points, the number of nonattainment counties - places with ozone levels that exceed the “‘acceptable” amount - would increase from 242 to between 515 and 650, depending on where the new bar is set.
Even some wilderness areas, including Yellowstone Park, could find themselves in the EPA’s non-attainment category. That’s because ozone also occurs in nature - as a result of chemicals released by plants and soil.
Nonattainment is not a trivial label for a county or region. Companies wishing to invest in these areas would be forced to comply with costly and time consuming permitting processes, expensive equipment requirements, and could even be required to reduce emissions from nearby plants to offset emissions at new facilities. Counties themselves could be denied highway and infrastructure funds if ozone levels were increased in their area. A smart business would simply avoid these areas due to the potential costs and headaches.
The Manufacturers Alliance, a manufacturing industry research group, estimated that the regulation could result in the loss of 7.3 million jobs. While those numbers might be exaggerated, it is clear that the regulations are going to cause job losses. And with a teetering economy and unemployment lingering over 9 percent, the EPA should not be pushing through a premature, costly, job-killing regulation. If Mr. Obama is serious about putting the kibosh on regulations that limit economic growth he would be wise to focus on this one.
Adam Peshek is a research associate at the Reason Foundation.