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New Unrealistic NAAQS Standards Will Hamper Economic Growth

 

By Kristen Walker,  American Consumer Institute

In an unprecedented maneuver, the Environmental Protection Agency (EPA) initiated another review of National Ambient Air Quality Standards (NAAQS) for fine particulate matter (PM2.5) merely 33 days after the 2020 one was completed. The 2020 version deemed current levels of 12 micro grams per cubic meter (mg/m3) perfectly adequate to protect public health; no changes were made. But this latest and unwarranted review will lower the standard to 9 mg/m3. The rule was made final in February.

The Clean Air Act requires an air quality review every five years. The next one wasn’t scheduled until 2025. So why instigate a new review immediately after the previous one was performed? Unless of course, you’re a new administration with a certain agenda.

Over the last two decades, EPA has demonstrated that PM2.5 emissions have declined 42 percent across the country, and counting. There is no reason to believe those numbers would not continue to fall. The current levels have allowed manufacturing industries to flourish while simultaneously reducing air pollution.

But mandating a stricter PM2.5 of 9mg/m3 will have dire consequences.

The manufacturing industry provides nearly 13 million jobs and generates approximately $2.85 trillion a year in economic activity. According to a recent Oxford Economics report, reducing the PM2.5 standard from 12 mg/m3 to 8 mg/m3 would result in a loss of up to nearly $200 billion and put approximately 900,000 jobs at risk.

A recent study by NERA Economic Consulting found that stricter ozone regulations could reduce U.S. GDP by $270 billion per year and $3.4 trillion from 2017 to 2040 and result in 2.9 million fewer jobs or job equivalents per year on average through 2040.

This rule will also dramatically increase the number of counties potentially failing to meet these standards (considered nonattainment) to nearly 600 total, affecting 40 percent of the population and jeopardizing the ability to complete projects and attract new manufacturing investment. These municipalities will suffer job loss, diminished economic activity, and reductions in tax revenue. Local leaders will be forced to make difficult decisions regarding construction projects such as new roads, bridges, and manufacturing facilities. A nonattainment designation could strip them of federal highway funds critical to keeping up with population growth.

With the strictest NAAQS regulations by far here in the U.S., companies will be forced to take their companies overseas. Our global competitors, like the European Union and China, have less stringent standards, at 25 and 35 respectively. This severely disadvantages the U.S., hampering our ability to compete and secure new industrial investments.

A good portion of PM2.5 pollution actually comes from wildfires and other miscellaneous activities—up to 70 percent—and yet it is the manufacturing, forestry, and mining operations that are responsible for the incredible emissions reduction over the last 20 years. Companies will face further burdens in their attempts to meet the new standard. Many will be forced to completely leave the market due to the high costs or unrealistic objectives associated with compliance.

The National Association of Manufacturers, who testified in February before the U.S. House Committee on Energy and Commerce, strongly encouraged invoking a joint resolution through the Congressional Review Act in order to “protect manufacturers from the significant harm that would result from the EPA’s final PM2.5 rule.” Such an action would provide the opportunity for legislators to overturn the agency rule.

Last month, Senators Cassidy (R-LA) and Tuberville (R-AL) led a coalition in strong opposition to the new standards. Because of the numerous industries affected and the negative economic impact that will result, they urge the administration to “immediately rescind this final rule.” They additionally assert that the current administration’s “efforts to prioritize emissions reductions and the virtue signaling of privileged climate change activists over American jobs and local communities continue to negatively impact our nation.” Thirty other senators and several industrial groups also signed on.

The current PM2.5 level is perfectly adequate; it should remain at 12 mg/m3. There was no need to re-evaluate the standard between the requisite five-year intervals, and certainly no need to lower it.

The final PM2.5 rule is bad news economically. Placing more counties in a nonattainment status due to the inability to adhere to the strict requirements threatens many manufacturing industries, which translates to lost jobs and economic activity. It’s time to put workers, industry, and the American consumer before politics.

 


Kristen Walker is a policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.theamericanconsumer.org or follow us on Twitter @ConsumerPal.