Would EPA's Proposed Ozone Standard Penalize Good Performance?
This week, major business groups launched a media campaign against EPA’s proposal to lower the national ambient air quality standard (NAAQS) for ozone, a major component of smog. The campaign focuses attention on the high cost of the regulation, arguably the most expensive ever proposed by any federal agency.
Under the Clean Air Act, EPA sets a health-based standard for certain pollutants, such as ozone, that are common nationwide. States must then develop plans to attain the new standard. For parts of the country that are not in compliance with the standard, EPA tags them as being in “nonattainment”, which triggers mandatory controls that states must impose on sources of pollution within their boundaries.
Despite the fact that the NAAQS program has led to dramatic improvements in air quality (including reductions in ozone) over the past three decades, it is this nonattainment tag that both states and businesses want to avoid. Controls include limits on new economic growth and federal funds for transportation projects. Research by academics has shown that economic growth is reduced in nonattainment areas and that some economic activity is diverted from the United States to overseas.
This debate over the ozone standard arises every five years, when EPA must revisit the standard and decide whether to change it. EPA must make a final decision on the standard by October 1.
One interesting aspect of the debate is whether EPA’s proposal will penalize states unfairly. A review of public comments on the EPA proposal suggests that certain areas of the country will be penalized with a nonattainment tag no matter what they do, even if their environmental performance is exemplary. There are several reasons for this:
--High background levels of ozone. Recent scientific research from NOAA and others suggests that the Agency understates “background” levels of ozone, thereby attributing too much of it to anthropogenic (man-made) activity that can be controlled. In 2013, the NOAA-sponsored Las Vegas Ozone Study (LVOS) concluded that southern Nevada (and other states in the intermountain west) would exceed EPA’s proposed standard about 50% of the time in the late spring due solely to the transfer of naturally occurring ozone from high in the atmosphere to ground level. For areas affected by these transfer events, control measures mandated under the Clean Air Act are likely to be unsuccessful. Evidence suggests that background is a significant issue across the country, but especially in the western United States.
--Expected reductions from pending regulations. Certain states would needlessly be tagged with a “nonattainment” moniker. EPA’s own data shows that a large percentage of the counties across the country will be placed in nonattainment if the current standard were lowered from 75 parts per billion (ppb) to 70 ppb (the high end of EPA’s proposed range). Of these counties, a high percentage can be expected to come into attainment by 2025 without having to take any additional action to control emissions because of recently promulgated regulations that are being implemented nationwide (e.g., controls on automobile emissions). Nevertheless, the Clean Air Act requires these states to be designated as being in nonattainment.
--No credit for early action. If given the opportunity, some areas of the country could voluntarily take actions to quickly reduce emissions and come into attainment with a new, lower standard if the Agency refrains from designating these areas as being in nonattainment. In 1997, EPA did just this through a program known as the Early Action Compact, and it worked well. Unfortunately, subsequent legal action convinced the Agency that it does have the legal authority to provide such credit for early action today.
Despite the limited flexibility afforded to it under the Clean Air Act, EPA can take actions now to avoid penalizing states. For example, at a recent congressional hearing, Administrator McCarthy acknowledged that the Clean Air Act does not compel a state to take action on emissions beyond its control.
In a recent research paper published June 5th in the Journal Science, researchers from NOAA described how the Agency can best account for background to focus attention on controllable emissions. They recommended a three-step approach: that EPA (1) establish more monitoring sites on the west coast to accurately measure “baseline” ozone (which, unlike background, can be measured), then (2) recalibrate global models that forecast background, and finally (3) recalibrate the regional models used by the Agency to determine whether states can attain the national standard. The Agency can then change its “exceptional events” rule and policy to ensure states are not penalized for emissions beyond their control.
The Agency has announced its intention to change its exceptional events rule and policy within the next year in anticipation of a lowering of the ozone standard. However, without a change to the models used to estimate background, such a change in policy is premature. When I recently inquired whether EPA will follow these recommendations, I was told that the Agency will reveal its plans to model background ozone only when the Agency announces its final decision in the fall.
As the legal deadline approaches, it will be interesting to see if EPA takes actions necessary to ensure states are rewarded, and not penalized, for good performance in reducing emissions.