Saturday, December 15, 2012

EPA's New PM Standards

EPA has just announced revisions to the National Ambient Air Quality Standards for Particulate Matter (PM, essentially dust and soot) under the Clean Air Act. Based on new science showing special danger from inhalation of very fine particles (2.5 micrometers in diameter and smaller), especially for the youngest and oldest Americans, EPA has reset the annual standard at 12 micrograms per cubic meter (down from 15 micrograms per cubic meter). The EPA is retaining  existing hourly concentration standards for fine particulates. The general fact sheet for the rule is here; and the complete text of the rule is here.

According to the EPA's Regulatory Impact Assessment (RIA) (here), the new rule is expected to provide total net benefits ranging between $3.3 billion and $9 billion per year (and those net benefits are insensitive to the use of 3% or 7% discount rates). It should be noted that 90% of the estimated benefits come from easy-to-quantify mortality reductions; harder-to-quantify environmental benefits are excluded. Thus, the estimates inevitably understate the actual net benefits to society of the new regulation.

Predictably, the headline at, which is a virtually official mouthpiece of the Republican Party, reads:
'It begins': EPA imposes controversial new rule on soot pollution
(See here). The "It begins" preamble is a reference to predictions that a second Obama term would lead to a massive and socially-costly wave of regulations. The article quotes the US Senate's lead climate change denier and energy-industry shill, James Inhofe, as referring to the new soot regulation as 'the first in an onslaught of post-election rulemakings that will place considerable burdens on our struggling economy.'" Apparently, Senator Inhofe didn't bother to read the RIA for the rule, or just doesn't believe it (just as he doesn't believe climate science). The Fox News article totally disregarded the EPA's RIA for the new rule, not even bothering to mention the estimates of economic costs and benefits, but focused heavily on employment effects, as if jobs are worth more than human lives.

As NYU Law School Dean Richard Revesz observed in his recent Max Weber Lecture at the European University Institute (here):
The idea of “job killing” regulations is based on a one-sided model in which regulatory benefits are completely excluded. Under this approach, it is better to be dead than unemployed, because a regulation that eliminates a job should not be adopted even if it saves a life.
The point is that, while unemployment effects of regulations are costs for the effected individuals (but not for the firms that might otherwise have employed them), and those costs should be incorporated into cost-benefit analyses, they are hardly the only costs or benefits that should matter. The primary concern must be for net social-welfare consequences.

I don't suppose the Obama Administration is overly worried about the immediate political response to the EPA's new PM rules from the likes of the American Petroleum Institute, its henchmen in Congress, and their marketing agents in the press. Past experience indicates that rules strongly supported by cost-benefit analyses, meeting "best practice" standards, are politically robust; efforts to overturn them in Congress always fail, and usually fail quickly. Ironically, this seems especially true for rules (such as National Ambient Air Quality Standards under the Clean Air Act) that are, by law, supposed to be set without regard to economic costs and benefits.

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