Sunday, April 25, 2004

The Environmental Protection Agency recently launched its massive new plan to fight smog. Get ready for another Washington mandate that will do more economic harm than environmental good.

Ozone, the primary constituent of smog, is a lung irritant caused by motor vehicle and industrial pollution as well as natural emissions. Smog was perhaps the single biggest reason for the 1970 Clean Air Act, and has been heavily regulated since. According to EPA, it has declined more than 30 percent in the last three decades.

Outside several trouble spots in California, virtually the entire nation now is in or near compliance with existing ozone air quality standards. And, due to measures already in the works (new motor vehicle emissions standards starting with the 2004 model year, new control requirements for power plants), those areas not yet in compliance are on their way toward it.

Despite lack of evidence the existing ozone standard was deficient, the Clinton administration decided to tighten it. EPA’s Clean Air Scientific Advisory Committee concluded this tougher standard would not be “significantly more protective of public health,” and called the change a “policy judgment.” The agency’s own cost-benefit analysis found the modest marginal benefits of the new standard outweighed by its costs. Nonetheless, EPA went ahead with the rule, sparking several years of legal challenges, all the way to the Supreme Court.

The Supreme Court essentially deferred to EPA’s judgment, and upheld the new standard. However, the legal delays meant this Clinton administration’s rule, first promulgated in 1997, would have to be implemented by its successor. And George Bush’s EPA Administrator Michael Leavitt now has obliged.

Mr. Leavitt estimates compliance costs of $50 billion over the next 15 years. The specific control measures for the 474 counties currently violating the new standard will depend on the extent of noncompliance in each county.

The possibilities include more stringent requirements on new or substantially modified industrial facilities, restrictions on highway construction projects, measures affecting small businesses, and more onerous vehicle inspection programs. Each of the 31 states with nonattainment areas must submit a compliance plan for EPA approval by 2007. These plans will likely remain in effect many years after.

The expense will affect employment, traffic congestion, and the cost of living. Even gasoline prices may be pushed up. Areas violating the new smog standard may have to use one of the costly specialized gasoline blends that have proliferated in recent years. And many refiners now will have more difficulty obtaining approval for much-needed capacity increases.

Of course, EPA’s announcement of the rule gave the impression the U.S. smog problem is worsening. Nothing could be more untrue. But while the benefits of this new standard may prove hard to identify, the costs almost certainly will not.

Ben Lieberman is director of air quality policy at the Competitive Enterprise Institute.

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