Rationalizing Air Pollution Regulation. (Briefly Noted)

By Lutter, Randall | Regulation, Spring 2002 | Go to article overview

Rationalizing Air Pollution Regulation. (Briefly Noted)


Lutter, Randall, Regulation


THE NATION'S SPUTTERING AIR POLLUTION policies may soon receive a major overhaul. On Valentine's Day, President Bush proposed that Congress mandate deep cuts in the levels of sulfur dioxides ([SO.sub.2]), nitrogen oxides ([NO.sub.x]), and mercury emitted by U.S. electric power plants. Under the Bush "Clear Skies Initiative," [SO.sub.2] emissions would decrease from the current level of 11 million tons per year to three million in 2018, [NO.sub.x] would fall from five million tons to 1.7 million, and mercury from 48 tons to 15.

At the same time, the Bush administration supports phasing out the New Source Review (NSR) program, at least as it applies to facilities regulated by the new legislation. The program requires power plants, refineries, and other facilities to gain advance approval from federal environmental regulators that new investment projects and maintenance procedures will meet stringent emissions requirements. Though environmentalists and some members of Congress laud NSR, the program has drawn criticism because the costs and uncertainty of the lengthy approval process encourage energy producers to operate outmoded, minimally maintained plants instead of refurbishing them with more efficient and more environmentally benign equipment.

If lawmakers and the White House can resolve disagreements over how to address greenhouse gas emissions, they have an opportunity to forge a sensible compromise that would enable the passage of new [NO.sub.x], [SO.sub.2], and mercury caps while dumping NSR. But that process will not yield legislation that can be implemented in an economically sound manner unless Congress and the administration pay attention to a few basic economic issues.

STRINGENCY MATTERS

The Environmental Protection Agency is still preparing estimates of the benefits and costs of its proposed emissions caps -- information essential to evaluate their stringency. Preliminary reports suggest, however, that the agency's analytic methods preclude identification of the best emissions caps. First, the estimates are not expected to take into account pending emissions cuts required by existing regulations. States already must cut emissions to meet the stringent air quality standards that EPA issued in 1997, yet EPA'S analysis is likely to ignore the effects of the cuts, thereby overstating the benefits of the new emissions caps. Second, EPA's analysis is expected to include benefits from air cleaner than required by the 1997 standards. Because EPA claims its standards are requisite to protect public health with an adequate margin of safety, air quality improvements in areas that would otherwise meet the standard should not be used to justify costly new emissions cuts. EPA should provide an economic an alysis that takes proper account of pending air quality improvements and discounts benefits that occur in areas that comply with its air quality standards. After considering that more sound analysis, Congress should set caps to maximize net benefits.

Mercury The benefits of reducing mercury emissions justify only very modest emissions caps. Research suggests that a severe mercury cut, like the one proposed by Sen. James Jeffords (I-Vt.) in legislation now before the Senate, would produce very small gains in public health but would boost electricity bills by more than a billion dollars per year.

Granted, some epidemiological studies suggest that children whose mothers ate very large quantities of mercury-contaminated fish while pregnant may experience subtle neurological problems. But very few women in the United States eat fish in quantities where significant neurological problems are of concern. Moreover, most contaminated fish consumed in the United States are ocean species, like swordfish and tuna, whose mercury levels are quite unlikely to respond to cuts in U.S. emissions of mercury. Finally, there is no accepted estimate of how mercury levels for fish caught in U. …

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