NERA: EPA Ozone NAAQS Regulation Could Cost $140 Billion per Year

In late 2014, the United States Environmental Protection Agency (EPA) proposed a rule that would further ratchet down national ambient air quality standards (NAAQS) for ground level ozone from the current level of 75 parts per billion (ppb) to a range of 65 to 70 ppb. Notably, the National Association of Manufacturers (NAM) declared the proposal to be the most expensive regulation ever imposed on the country.

A study recently conducted by NERA Economic Consulting and commissioned by NAM confirms NAM’s earlier statement. Specifically, the study reveals that reducing the current ozone standard to 65 ppb would reduce U.S. gross domestic product (GDP) by $140 billion per year, result in 1.4 million fewer job equivalents on average through 2040, and cost the average U.S. household $830 per year in the form of lost consumption.

The study also looks at the impact of the new regulation on individual states. The Commonwealth of Virginia, for example, can be expected to see a loss of gross state product approaching $69 billion, over 39,000 lost jobs or job equivalents per year, $35 billion in total compliance costs and a $1,440 drop in average household consumption per year. The impacts on other states can be viewed below: