NCPA - National Center for Policy Analysis

How EPA Could Destroy 7.3 Million Jobs

December 2, 2010

The Environmental Protection Agency (EPA) is moving blindly ahead with new regulations that will increase dramatically the energy costs of U.S. industries, reducing their competitiveness and profitability and making it less likely they will hire, says William F. Shughart II, a senior fellow at the Independent Institute.

The new EPA rules call for a reduction in the national ambient air-quality standard for ground-level ozone, a precursor of smog, from 75 parts per billion to between 60 and 70 parts per billion, a cut of up to 20 percent.

While this might seem innocuous enough, setting a more stringent ozone standard will in fact cause economic havoc, says Shughart.

  • A study by the Manufacturers Alliance/MAPI warns that the new standard will destroy an estimated 7.3 million jobs nationwide and add $1 trillion annually in new regulatory costs beginning in 2020.
  • In Mississippi, the EPA proposal will kill an estimated 130,000 jobs and add $32.2 billion annually in new regulatory costs from 2020 to 2030.

Direct compliance costs are only part of the burden, however.  If the new standards go into effect, the costs of nearly everything we buy also will go up, as higher energy prices raise production costs.  This huge price tag, however, wouldn't appreciably improve public health.

The EPA's proposed ozone standard exemplifies arbitrary overregulation that will destroy jobs and harm our economy without any offsetting benefit, says Shughart.

Source: William F. Shughart II, "How EPA Could Destroy 7.3 Million Jobs," Independent Institute, November 12, 2010.

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