Manufacturers: Ozone standard could be most costly regulation ever

A looming Obama administration rule aimed at updating the federal ozone standard could be the single most expensive federal regulation in U.S. history, according to a new study commissioned by the National Association of Manufacturers (NAM). 

The proposal, expected to be unveiled by year’s end, could lead to millions of lost jobs, $2.2 trillion in compliance costs and a $3.4 trillion blow to gross domestic product between 2017 and 2040, according to the 142-page study.

{mosads}The analysis does not take potential public health benefits into account.

NAM President Jay Timmons contends the regulation would saddle manufacturers with a new regulatory burden, just as the industry is making a comeback from the economic downturn of the late 2000s.

“[B]ut 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,” Timmons said. “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.”

In light of the potential costs, the manufacturers group plans a “broad education campaign” in “key states” to highlight the rule’s potential impact ahead of this fall’s midterm elections.

The study, conducted by NERA Economic Consulting, is based on the premise that the Environmental Protection Agency would seek to lower the ozone standard from 75 parts per billion (ppb) to 60 ppb.

The move would reduce U.S. GDP by $270 billion per year, a loss of $3.4 trillion from 2017 to 2040, according to the study. Further, it would result in 2.9 million fewer jobs per year on average through 2040, while raising electricity costs for manufacturers and households alike, the group warned.

“The EPA is considering setting ozone levels below what exists at national parks, such as Yellowstone and Denali, said NAM Vice President of Energy and Resources Policy Ross Eisenberg. “It is vital that the Obama administration allow existing ozone standards to be implemented rather than move the goalposts with another set of requirements for manufacturers. Trillions of dollars are at stake.”

The EPA is scheduled to propose the standards in December, according to the agency’s formal rulemaking agenda.