Benefits of EPA Air Rules Outweigh Costs, Report Says

Charleston Gazette
21 September 2011
By Ken Ward Jr.

CHARLESTON, W.Va. -- A series of air pollution rules from the Obama administration provide major public health benefits with dollar values far greater than their compliance costs, according to a new report by a think tank affiliated with organized labor.

The Economic Policy Institute released its report as Republican leaders in the House of Representatives have scheduled a series of votes on measures aimed at scaling back, blocking or delaying the U.S. Environmental Protection Agency proposals.

Institute analysts warn, "Fears that these rules together will deter economic progress are unjustified."

"The dollar value of the benefits of the major rules finalized or proposed by the EPA so far during the Obama administration exceeds the rules' costs by an exceptionally wide margin," the group's report said. "Health benefits in terms of lives saved and illnesses avoided will be enormous."

Legislation co-sponsored by Reps. Shelley Moore Capito and David McKinley, both R-W.Va., would delay any EPA action on a cross-state pollution rule and another measure to reduce toxic air emissions from coal-fired power plants. The measure also would create an interagency panel that would study how EPA proposals would impact competitiveness, energy prices and employment.

EPA already performs cost-benefit studies on new environmental rules, and the Economic Policy Institute used those studies to examine the broader impacts of new air pollution measures being considered by the agency. The institute concluded:

Setting aside the Cross-State Air Pollution rule, the combined annual benefits from all final major rules by the Obama EPA exceed their costs by $10 billion to $95 billion a year. The benefit-to-cost ratio ranges from 2-to-1 to 20-to-1.
The net benefits from the Cross-State Air Pollution rule exceed $100 billion a year (this rule is treated separately because benefits accruing from action under the Bush administration and the Obama administration cannot be disentangled).
The combined annual benefits from three major proposed rules examined here exceed their costs by $62 billion to $188 billion a year. The benefit-to-cost ratio ranges from 6-to-1 to 15-to-1.
When fully in effect in 2014, the combined costs of the major rules finalized by the Obama administration's EPA would amount to significantly less than 0.1 percent of the economy.
Assuming the proposed rules are also finalized, when fully in effect in 2016 the combined costs of the major EPA rules finalized and proposed so far under the Obama administration would amount to about 0.13 percent of the economy.

"The regulations finalized and proposed by the Obama administration are likely to be of tremendous value to the nation, producing a wide range of significant health benefits," the report said. "Further, the finding that the estimated costs of these regulations amount to only about one-thousandth of the size of the economy, as well as the extended period over which they will take effect, indicate that they would not be a major impediment to economic or job growth in the near-term or in the future."

Reach Ken Ward Jr. at kw...@wvgazette.com or 304-348-1702.