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False Choice: Ozone Decision Bad for the Environment, Bad for the Economy, and Bad for the President

J. Mijin Cha

In a misguided effort to shore up his reputation with business, President Obama’s recent decision to suspend proposed ozone standards will ultimately result in higher overall costs for the country. The decision also furthers the false notion that we must choose between job creation and environmental protection. While economic costs projected from environmental regulations are often vastly overstated, the resulting improvements in health and productivity are often invisible in our economic accounting. Almost certainly, in fact, the economic costs of weaker ozone standards, due to adverse health and other impacts, will far outweigh the job-saving gains touted by opponents of tighter rules. 

The claims that pollution regulations hurt economic growth have been continually debunked.  In fact, recent estimates from the EPA show that the Clean Air Act Amendments will result in $2 trillion in savings by 2020. The economic savings are a result of increased health and productivity due to cleaner air. A central EPA estimate shows benefits of the Clean Air Act Amendments outweighing costs by thirty-to-one. Even the lowest estimates show benefits outweighing costs by three-to-one.

An analysis of the 1997 ozone rules, the last substantive overhaul, shows that the economic havoc predicted by polluting industries did not materialize. In fact, areas in attainment (within the pollution limit) and nonattainment (pollution levels exceeding the set limit) have very similar economic growth and unemployment rates. Allowing increased pollution does not create jobs.

Increased pollution does, however, wreak havoc on people’s health and health care costs. The American Lung Association estimates that, currently, roughly half of the entire population lives in areas with unhealthy ozone or particle pollution. Air pollution can cause and aggravate asthma, bronchitis, heart problems, and early death. These health problems result in substantial increases in health care costs.  A recent study showed that failing to meet federal air quality standards in a two year period resulted in over $190 million in health care costs in California alone.

Voters, too, are against the decision. A recent bipartisan poll of likely 2012 voters found overwhelming support for strengthening ozone regulations.  Three-quarters of those polled support stricter limits on ozone and over 70 percent opposed efforts by Congress to stop EPA from updating the ozone standards. The poll also showed that most (65 percent) do not believe that regulations negatively impact job creation and over half of those polled believe that new regulations would create jobs through innovations. With new regulations, companies would upgrade and improve existing equipment, which would boost demand for manufacturing and products.

Thus, the Administration’s failure to strengthen ozone regulations is not only wrong environmentally and economically, it is misguided politically. As Paul Krugman plainly states, “a lousy decision all around.”