Ozone Exemplifies Diminishing Returns

The fact that President Obama had to direct his Environmental Protection Agency to delay its proposed ozone NAAQS illustrates just how ideological and myopic the agency has become. Regulators lacked compelling reason or legal requirement to issue a new rule before 2013, when the ozone standard will come up for its 5-year review required by the Clean Air Act. Moreover, the proposed revision would have been the costliest environmental regulation ever issued.

EPA’s proposal would have tightened the federal standard for ozone, moving from its current level of 0.075 parts per million (ppm) to somewhere in the range of 0.060 to 0.070 ppm. According to the agency’s own calculation, 96 percent of U.S. counties would fail to meet such a threshold—including the pristine Yellowstone National Park. And when EPA deems a region in “non-attainment,” individuals face thousands of dollars in fines and states risk losing billions in federal funding.

What does it take for an area to reach the current threshold? Just consider Wichita. As John Merline over at Investor’s Business Daily reported:

Few would think of this south-central city in Kansas as having a big smog problem. But under current standards it’s now one day away from breaching the EPA’s standard for ozone, the main ingredient in smog.

That’s because the city’s 4th of July fireworks pushed its ozone levels over the EPA limit for the third day this year. One more violation and it could find itself forced to produce an EPA-approved smog-cutting plan that would, as the Wichita Eagle reported, “cost taxpayers and businesses millions of dollars.”

According to a Manufacturers Alliance (MAPI) study, EPA’s proposed standard would have cost over 7 million jobs in less than a decade and would have reduced GDP by $676.8 billion in 2020. Even if these impacts could be shown to be over stated by a factor of two, 3.5 million jobs and $500 billion annually are still very large numbers.

Over the past 22 years, regulators have reduced the ozone standard by nearly 40 percent, from 0.12 ppm to the current level of 0.075 ppm. We’ve witnessed dramatic reductions in air pollution in that time, with ozone falling by more than 20 percent. With each reduction, subsequent ones become more difficult and more expensive.

It’s a classic case of diminishing returns. For example, ozone is a byproduct of nitrogen oxides (NOx). While it took a more than 400,000 ton drop in NOx to lower ozone levels from 0.084 to 0.075 ppm, it will take nearly 8 times that to go from 0.075 to 0.06 ppm.

The currently available science on the health effects of exposure to ozone does not support the allegations EPA uses to justify its agenda. In their book “Air Quality in America: A Dose of Reality on Air Pollution Levels, Trends, and Health Risks,” American Enterprise Institute fellows Joel Schwartz and Steve Hayward provides compelling evidence that special interest lobbies have grossly inflated the risks of ozone at today’s levels. In contrast to EPA’s claims regarding asthmatic children and people with respiratory problems, the incidence of asthma in the U.S. has been increasing as ozone levels have been going down.

Our environmental regulations are decades old. They have been revised from time to time through a patchwork process. What is needed now, especially since we are likely to face years of a weak economy, is a total re-examination of pollution and waste issues and legislation that deals with them more effectively and reflects both what has worked in the past and what hasn’t. Most pollution problems today are not national. They are state and regional specific. The best way to use our nation’s scarce resources better is through approaches that are state and regionally focused. Everything good does not have to be handed down from Washington.

Environmental values are deeply ingrained in society. The time has come to foster citizen environmentalism and devolve authority and responsibility.

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