posted on 08.06.14

A potentially stricter ozone regulation proposal due from the Obama Administration in December 2014 could be the costliest in the nation’s history, according to a new study conducted by NERA Economic Consulting for the NAM. The study finds that the Environmental Protection Agency’s (EPA) expected proposal to tighten the air quality standard for ground-level ozone could cost the U.S. economy as much as $3.4 trillion through 2040. The Hill, Politico (subscription required) and numerous other media outlets around the country reported the study’s findings. Click here for our news release and here for an executive summary of the report. “Manufacturing in the United States is making a comeback, and we’re reducing emissions at the same time, but tightening the current ozone standard to near unachievable levels would serve as a self-inflicted wound to the U.S. economy at the worst possible time,” said NAM President and CEO Jay Timmons. “This rule would undermine our work to expand manufacturing in the United States, making it almost impossible to increase operations, create new jobs or keep pace internationally.” According to the study, the EPA’s expected proposal to revise the current standard from 75 parts per billion (ppb) to 60 ppb could:

– Reduce U.S. GDP by $270 billion per year;

– Put 2.9 million jobs at risk per year;

– Reduce the average U.S. household’s consumption by $1,570 per year; and

– Increase natural gas and electricity costs for manufacturers and households across the country.

“We are rapidly approaching a point where we are requiring manufacturers to do the impossible,” noted NAM Vice President of Energy and Resources Policy Ross Eisenberg. “The EPA is considering setting ozone levels below what exists at national parks, such as Yellowstone and Denali. It is vital that the Obama Administration allows existing ozone standards to be implemented rather than move the goalposts with another set of requirements for manufacturers. Trillions of dollars are at stake.” Requiring a reduction to 60 ppb would leave nearly all of the United States in a so-called “nonattainment zone,” ending the manufacturing boom.

Manufacturers in nonattainment areas would not be able to make investments and expand operations without other businesses reducing their emissions or, worse yet, shuttering their operations. The proposal would impact manufacturers of all sizes across every industrial sector. For more information about the state-by-state impacts, click here, and watch our short video, titled “Understanding Ground-Level Ozone Policies.” Over the past three decades better technology and a commitment on the part of manufacturers to reduce emissions have yielded a considerable decrease in the nation’s ozone levels. Since 1980, even as the economy has expanded, ground-level ozone levels have fallen by 25 percent. Manufacturers continue to work today to adhere to existing ozone standards, utilizing state-of-the-art equipment to ensure that this downward trend continues. President Obama halted the EPA’s most recent proposal to modify the federal ozone standard in 2011, citing “regulatory burdens and uncertainty.”

With so much at stake for the manufacturing sector, the NAM will conduct a broad education campaign in key states during the August congressional recess and throughout the fall to increase understanding of the proposed rules and their impact on states and municipalities.

Provided in partnership with the National Association of Manufacturers.