Summary and Critique of the Benefits Estimates in the RIA for the Ozone NAAQS Reconsideration

National Economic Research Associates for the American Petroleum Institute / by Anne E. Smith

[Abstract] In this report prepared for the American Petroleum Institute, NERA Senior Vice President Dr. Anne E. Smith argues that statements made by the the US Environmental Protection Agency (EPA) on health benefits from lowering the Ozone National Ambient Air Quality Standard (NAAQS) grossly misrepresent what the EPA is actually estimating as the potential benefits of reducing public exposures to ozone. The EPA reduced the NAAQS in 2008. At the time, a final Regulatory Impact Analysis (RIA) was released that estimated costs and benefits of several alternative NAAQS standard levels. In 2010, EPA announced it would be reconsidering the Administrator’s decision to set the standard at 0.075 ppm, and would consider levels in the range of 0.060 to 0.070 ppm. A “Supplemental RIA” was released that provided “updated” benefits estimates for the three alternative standards in the original 2008 RIA, and supplemented these with benefits estimates for alternative Ozone NAAQS of 0.060 and 0.055 ppm. In this report, Dr. Smith explains the changes between the two versions of the ozone RIA, and provides a summary and critique of the EPA’s benefit estimates for the ozone standard reconsideration. Dr. Smith’s primary conclusions are that none of the alternative ozone standards, including the current one of 0.075 ppm, can be justified on the basis of net ozone-related benefits being positive. If based on ozone benefits alone, not one of the EPA’s estimates of the benefits of reducing ozone to a tighter alternative ozone standard is as large as the costs of attaining that respective ozone standard — all cost more than the ozone benefits they might provide.


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