The Environmental Protection Agency (EPA) just announced its decision to tighten the ozone standard to 75 parts per billion in an effort to strengthen public health safety for asthmatics, children, and the elderly and to limit environmental damage to vegetation and ecosystems. Yet, the policy in place already proves to be stringent enough and the high costs associated with lowering the standard will likely outweigh any benefits.
In its Regulatory Impact Analysis, EPA estimates that tightening the standard to 75 parts per billion would prevent a number of additional adverse health effects. A reduction in ozone-level standards would make sense if the economic benefits of better health (fewer doctor visits, fewer inhalers, higher work and school attendance) convincingly outweighed the costs of implementing the standard. Nevertheless, the direct causality between a more stringent ozone standard and better health effects is uncertain. Thus, if a more stringent ozone standard does not contribute to health benefits as much as EPA claims, the benefits will be overestimated.
The costs for states to comply with a tightened standard will be substantial. For instance, federal mandates on pollution can discourage companies to build new plants, and counties that do not meet attainment measures can lose federal transit funding. The EPA estimate for implementing a standard of 75 parts per billion ranges from $5.5 billion to $8.8 billion. It is unlikely the benefits will outweigh the costs.
A more stringent ozone standard would have a number of unintended consequences as well. Displacing expenditures for housing, food, and other factors that are highly correlated with improved health could result in potentially thousands of premature deaths. Additionally, a tighter standard would make the ethanol mandate costlier, increasing both energy bills and the price at the pump.
A silver lining does exist in the EPA’s announcement; the administration deserves some credit for not tightening the standard lower than 75 parts per billion. The previous standard was already stringent enough and was more than sufficient to protect the public’s health. Tightening the standard beyond 75 parts per billion would increase the number of non-attainment counties and exacerbate the economic burden associated with the cost of compliance. Environmentalists and public health advocates have argued for a standard as low as 60 parts per billion with no acknowledgment of the costs involved. Although the previous policy was stringent enough, it could have been worse.