Industry Groups Are Freaking Out About Obama’s New Smog Pollution Rule

Smog in downtown Los Angeles, Tuesday, April 28, 2009. CREDIT: AP PHOTO/NICK UT
Smog in downtown Los Angeles, Tuesday, April 28, 2009. CREDIT: AP PHOTO/NICK UT

The Environmental Protection Agency issued a new draft proposed rule on Tuesday to tighten already-existing restrictions on ground-level ozone pollution, the main ingredient of urban smog.

Under the draft proposal, states would be required to lower the level of ozone pollution allowed to be in the air. Right now, the current standard is 75 parts per billion, and the new rule would change that to somewhere between 65 to 70 parts per billion. The rule would require some states with bad pollution to expand their ozone pollution monitoring, and require improvements to systems that notify the public when their air quality is at an unhealthy level.

The EPA predicts this will do wonders for public health and, by extension, the economy. Scientists say that ground-level, or “bad” ozone is a pollutant with significant health risk, with the potential to reduce lung function and aggravate asthma, especially in children and older adults. Ground-level ozone also increases the risk of premature death from heart or lung disease, according to EPA.

Preventing the likelihood of illnesses, missed sick days, and other problems triggered by smog would produce savings of $6.4 to $13 billion annually in 2025 for a standard of 70 parts per billion, and $19 to $38 billion annually in 2025 for a standard of 65 parts per billion, the EPA estimates. That estimate does not include California, which has particularly bad ozone pollution and would have a little longer to meet the requirements of the rule. But the savings there would be huge, too, EPA estimates — $1.1 to $2 billion annually after 2025 for a standard of 70 parts per billion, and $2.2 to $4.1 billion for a standard of 65 parts per billion.


As it happens, industry groups and a number of high-ranking Republicans do not agree with the EPA. Instead, they are already predicting doom — and if you can believe it, they’re a little more exasperated than usual.

On Thursday, Politico published an article brazenly titled “’The Most Expensive Regulation Ever’,” roughly quoting the National Association of Manufacturers (NAM), which says the rule would result in the loss of $3.4 trillion and 2.9 million jobs for the manufacturing industry by 2040. They’re not alone — the American Petroleum Institute has also deemed the proposal “the costliest regulations ever” proposed.

Republican Senators David Vitter and James Inhofe agree. In a letter to the White House, the two said White House also said that the proposed rule would be “one of the costliest rules ever issued by EPA,” as well as being one of “the most devastating regulations.” And the House Energy and Commerce Committee, led by Republican Rep. Fred Upton, also noted that the rule could represent “the most expensive rule ever imposed by the agency.”

Those statements are extreme even by congressional Republicans’ standards. But here’s why they should be taken with a grain or two of salt.

First of all, the regulation issued on Tuesday is just a draft proposed rule. The final proposal, expected December 1, could be drastically different, or not even change the standard at all (though, considering EPA administrator Gina McCarthy’s statements on the issue, that latter suggestion does seem unlikely). A comment period will follow that proposal, and the final rule could look entirely different than the proposal. Even the Congressional Research Service says it’s too early to gauge how much the regulation could cost. We just don’t know what it will look like in the end.


Second of all — and this one is important — both industry groups and Republicans have been overestimating the cost of regulations like this since the EPA first began issuing regulation of this kind. In addition, the EPA has historically underestimated the benefits. Those statements are backed up by a survey done by The Economic Policy Institute, which in 1997 found that estimates made before EPA regulations went into effect — even the estimates made by the EPA itself — nearly always significantly overshot how much those regulations would actually cost American industry.

This same kind of industry gloom and doom prediction happened when the EPA strengthened its ozone regulation in the 90s, too. And according to an analysis of the effects of those regulations from the Center for American Progress, those predictions didn’t pan out — in fact, the areas most impacted by those regulations experienced very similar economic growth and employment rates to the nation as a whole. The failure of industry’s dire predictions at the time “suggests that their recent, similar attacks on the pending ozone standard also lack credibility,” the report reads.

All this is not to say that industry won’t take some kind of financial hit for complying with regulations to reduce pollution. It will. What it is to say is that there is reason to take the rhetoric that this will be the most “expensive” and “devastating” EPA regulation ever with a hefty dose of skepticism. It is hyperbolic and, frankly, premature.

A final proposal on the new ozone rule is expected to be issued by December 2015. Whatever it does eventually contain, expect the incoming Republican majority in Congress to attempt to block or overturn the whole thing. Sen. Mitch McConnell of Kentucky, the incoming majority leader, has already vowed to do so.