Legal & Regulatory

EPA’s Proposed Revisions to Ozone Standards to Cost up to $15B Annually

The Environmental Protection Agency (EPA) on Wednesday proposed to revise the national ambient air quality standards (NAAQS) for ground-level ozone to a range of 65 to 70 parts per billion (ppb) and sought comments on a level as strict as 60 ppb.

The proposed level applies to primary (health-based) and secondary (welfare-based) ozone standards, but it is not as stringent as anticipated. Agency staff from the EPA’s Office of Air Quality Planning and Standards in a 597-page final policy assessment released on Aug. 29 recommended revising the primary standard to within a range of 60 ppb to 70 ppb.

The agency said in a statement, as it released the proposed rule on the morning before Thanksgiving Day, that it estimates the benefits of meeting the proposed standards will “significantly outweigh” the costs.

Annual costs are estimated at $3.9 billion in 2025 for a standard of 70 ppb and $15 billion for a standard of 65 ppb. The agency’s Regulatory Impact Analysis for the rule meanwhile suggests that the alternative standard level could cost up to $39 billion annually.

“If the standards are finalized, every dollar we invest to meet them will return up to three dollars in health benefits,” said the EPA.

The Clean Air Act (CAA) requires that the EPA set NAAQS for ozone and five other pollutants considered harmful to public health and welfare, and to review those standards every five years. In 2010, the EPA proposed to implement a more stringent ozone standard than those set by the Bush administration in March 2008.

The new rule would have changed the cap for primary and secondary ozone standards, emitted during any eight-hour period, from 75 ppb to between 60 ppb and 70 ppb. But in September 2011, just before the rule was to be finalized, President Obama scuttled the so-called “smog rule” to reduce regulatory burdens and uncertainty for industry.

In an op-ed posted on CNN’s website, EPA Administrator Gina McCarthy underscored the proposed rule’s health benefits over its economic impacts. “When EPA revised ozone standards in 1997, critics claimed ‘new air quality regulations…will destroy jobs, hike business costs, and exact painful lifestyle changes while doing little to improve health…’ None of that ever came true,” she wrote.

The EPA’s statutory deadline for commencing its periodic review, required under the CAA, passed on Mar. 12, 2013. But this April, finding for a number of environmental groups, a U.S. District Court in California ordered the EPA to issue its proposed decision on revising the ozone NAAQS by Dec. 1, 2014, and to finalize the rule by Oct. 1, 2015.

Enforcement of the NAAQS is the responsibility of states, which are required to adopt EPA-approved state implementation plans to attain and maintain compliance with the standards.

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)

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