NCPA - National Center for Policy Analysis

EPA Regulation Would Cost $100 Billion Per Year

October 16, 2014

Chris Prandoni at Forbes is reporting that the Environmental Protection Agency has sent possibly the most expensive EPA regulation yet to the White House's Office of Management and Budget for review. At a cost of $100 billion annually according to the EPA itself (though the National Association of Manufacturers says the rule would cost $270 billion per year), the agency's new rule would reduce the amount of ozone in the air.

But the problem, says Prandoni, is that the EPA has already reduced ozone to such low levels that the costs of the proposed rule far outweigh any benefits.  He explains how the rule works:

  • Areas within the United States that do not meet the EPA's air quality regulations are designated as "nonattainment" areas.
  • States in those regions are heavily regulated and are required to submit proposals to the EPA for attaining the agency's air quality rules.
  • Many businesses are deterred from locating in these areas, because the regulations can drive up costs and require them to upgrade their equipment.

Prandoni offers a map depicting the areas that are currently "nonattainment" regions under the EPA's 2008 ozone standard. There are only a few areas on the map that receive such a designation. Under the proposed rule, however, the vast majority of the United States would be deemed in "nonattainment."

In July, Senator David Vitter (R-La.) and Rep. Lamar Smith (R-Texas) wrote a letter to the EPA, asking that it take into account the many adverse effects that it often ignores when analyzing the costs of its rules, including "public health, welfare, social economic, or energy effects." The letter continued: "Each of these criteria should be specifically addressed. This includes the public health and welfare losses from reduced income and employment that could result from a tighter standard that limits economic growth."

Prandoni notes that the EPA had readied the ozone rule in 2011, but the rule was delayed by President Obama for fear of hurting his reelection chances.

Source: Chris Prandoni, "Did The Most Expensive Regulation Ever Just Arrive At The White House?" Forbes.com, October 14, 2014. 

 

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