New CRS Report: “Powering Down: How Washington’s Ozone Plan Will Snuff Out Ohio’s Economic Recovery”

By SBE Council at 24 August, 2015, 7:51 am

Federal Controls From Tighter Ozone Caps Threaten Economic Growth, Study Finds

Link to Report 

Cleveland, Ohio, August 24, 2015: A plan from the U.S. Environmental Protection Agency (EPA) to dramatically tighten federal ozone limits will impose new and damaging regulatory restrictions across 85 percent of Ohio’s economy, and also threatens thousands of good-paying jobs in urban areas, according to a new economic study commissioned by the Center for Regulatory Solutions (CRS), a project of the Small Business Entrepreneurship Council (SBE Council).

The report, “Powering Down: How Washington’s Ozone Plan Will Snuff Out Ohio’s Economic Recovery” also highlights strong and broad-based opposition to overreaching federal policies that ignore the state’s history of environmental progress. Through interviews, letters to the Obama Administration and other channels, a bipartisan coalition of state lawmakers, local officials and leaders of the business community are sending an unmistakable message to Washington: This ozone plan goes too far.

Newly released polling shows that Ohio voters are also wary of unwarranted federal environmental controls over the state’s economy and job creators. A statewide public opinion poll commissioned by the National Association of Manufacturers found 65 percent of Ohio voters rate their local air quality as “Excellent” or “Good.” Strong majorities believe stricter federal air quality regulations will make it harder for local businesses to start or expand (69 percent), increase the price of everyday goods and services (80 percent) and increase the amount they pay in taxes (78 percent). By a wide margin, Ohioans think that less economic growth and fewer jobs opportunities caused by regulations are a greater problem (73 percent) than low air quality (16 percent).

These concerns in Ohio reflect widespread opposition across the country to the EPA’s plan to tighten the current ozone standard of 75 parts per billion (ppb) into the range of 65 to 70 ppb. As detailed in today’s CRS report, local and national groups representing cities, counties, transportation departments, agricultural agencies, state-level environmental regulators, labor unions, construction companies, energy producers, manufacturers and many other stakeholders have all sounded the alarm. These diverse stakeholders are pleading with the EPA to stick with existing 75 ppb standard, which was set less than a decade ago and has yet to be fully implemented.

Ironically, President Obama delayed EPA’s plan to dramatically tighten the federal ozone standard in 2011 citing concerns about the regulation’s impact on the economy. Local officials, labor union members, businesses and many others continue to express these concerns as economic conditions continue to present challenges for many regions of the county and for many industries.

“This ozone proposal gives the federal government far too much control over state and local planning decisions that shape the Ohio economy,” said Karen Kerrigan, President of the Small Business & Entrepreneurship Council. “Ohio is one of the biggest success stories in terms of self-regulation and working hard to comply with the federal Clean Air Act. Now, the EPA is dramatically moving the goalposts. The standard is so strict – approaching background levels in some areas – that the vast majority of Ohio’s economy will be found in violation immediately. Violation of the ozone standard gives EPA the authority to effectively rewrite state and local environmental laws the way Washington wants.”

“No wonder this EPA proposal has been met with such strong and diverse opposition from across Ohio’s political spectrum. Washington officials, all the way up to President Obama himself, should listen to the voices coming from Ohio and across the country and once again give the current standard a chance to work.” 

Excerpts From the Report: 

• By lowering the National Ambient Air Quality Standard from 75 parts per billion (ppb) into the 65 to 70 ppb range, EPA would cause at least 34 counties in Ohio to be in violation of federal law. These are some of Ohio’s most populated counties, concentrated around the Cleveland and Cincinnati metropolitan areas, but a number of Ohio’s rural counties may be dragged into non-attainment as well.
• The vast majority of Ohio’s economy, population, and workforce could be caught in the net of ozone non-attainment under the EPA’s proposed range. The thirty-four impacted counties represent 84 percent of the state’s GDP, 80 percent of the state’s workforce, and 77 percent of the state’s population.
• Ohio’s substantial efforts to improve its air quality are perhaps best summarized by Lt. Governor Mary Taylor, who said “Ohio is in the process of implementing dozens of massive new regulations put in place by [EPA] over the past several years … Taken together, these regulations impose billions of dollars in new costs. They will also drive major reductions in the emissions that cause ozone, making a new NAAQS even less necessary.”
• The state’s power plants will face the dual challenge of more expensive inputs (as this rule will confer costs on energy production) and expenses associated with its own compliance (ie. the purchase of selective catalytic reduction to control NOx) – the end result of this “tax” on industry – is higher residential and industrial energy costs.

Cleveland Impacts 

• Under the proposed range for EPA’s new ozone NAAQS, an eight country region stretching from Ashtabula County to Lorain County would be classified in non-attainment.
• The eight counties that surround Cleveland account for 30 percent ($177.2 billion) of state GDP and nearly 30 percent of the state’s workforce (1.7 million individuals).
• The economic burdens from this regulation will hit the hardest in Ashtabula and Lorain Counties where the manufacturing sector represents the largest sector of their economies (15 and 14 percent, respectively).
• Five of the eight Cleveland-area counties already suffer from high levels of poverty, ranging from 14.6 to 19.2 percent.
• All of the relatively non-invasive measures (like the E-Check program) have already been undertaken in Cleveland, and in pursuit of attainment, Ohio will have to apply methods that will curtail its economic growth.Cincinnati Impacts
• In the Cincinnati Metro area the entirety of Butler, Claremont, Hamilton, and Warren counties would be thrust into non-attainment. This region generates $92.8 billion or 16 percent of Ohio’s GDP and employs almost 15 percent of its workforce.
• The new ozone standard would be punishing counties that, like Hamilton County, have substantially decreased their ozone levels, and would continue to see improvements as the 2008 standard is enforced.

Survey

• A recent survey commissioned by NAM finds that voters in Ohio overwhelmingly have a high opinion of the quality and cleanliness of their local air. According to the survey, nearly two-thirds (65 percent) of Ohio voters rate their local air quality as “Excellent” or “Good.”
• Most Ohio voters (55 percent) oppose any additional environmental regulations on businesses, believing these would have negative impacts on the economy through higher taxes (78 percent), higher prices (80 percent), and making it harder to start or grow businesses (69 percent).
• By a wide margin, Ohioans think the bigger problem for their local area is “less economic growth and job opportunities caused by regulations” (73 percent) rather than “lower air quality caused by pollution” (16 percent).
• Fewer than four-in-ten Ohioans (35 percent) think that the federal government should implement stricter environmental regulations on businesses operating in their local area. 

Bipartisan voices speak out 

State Representative Jack Cera (D). “Ohio is a manufacturing powerhouse with a major natural resource and energy industry…Ohio has made tremendous strides in clean air technology and I believe we need to see the progress of this technology in action. The state’s manufacturers are strong believers in sustainable practices, ranging from basic research into innovative, cost-effective technologies to minimizing natural resource impacts by increasing efficiencies and conservation efforts…It is my sincere hope that the federal government will strike a sensible balance that gives current technologies and practices a chance before embarking on new endeavors.”

State Representative Martin J. Sweeney (D). “The numbers show that Ohio’s economy is fragile. In so many sectors of the state’s economy, there is a strong sense that the EPA’s proposed ozone standards will reduce hiring, cause layoffs, raise prices, and bring growth to a halt.”

Lt. Governor Mary Taylor (R). “We do not believe that environmental protection and economic development are mutually exclusive. The current standard is helping improve the quality of our air, and any further reduction is unjustified.”

Ohio Attorney General Mike DeWine (R). “Even were the supporting documentation cited by U.S. EPA to be accepted wholly at face value, it would not support the proposed restrictive levels.”

U.S. Representatives Robert Latta (R-OH) and Tim Ryan (D-OH). “EPA data indicates that the air is cleaner today than it has been in thirty years, progress due in part to control measures associated with past NAAQS standards. This success shows that ozone NAAQS when given an opportunity to be fully implemented produce significant reductions…Moreover, EPA acknowledges that there are alternative views on health effects evidence and risk information. Due to all these uncertainties, allowing the current standard to take full effect would alleviate any perceived concerns with measured scientific data and allow EPA time to further consider those uncertainties while still protecting air quality.”

U.S. Representative Jim Renacci (R-OH). “Significant portions of the country, including Ohio, are still struggling to meet the EPA’s 2008 guidelines, so moving the goalposts now will only lead to more uncertainty and higher compliance costs, which will ultimately be passed onto the consumer.”

David J. Berger (D), Mayor, Lima, Ohio. “Parts of our nation’s Midwest have not yet recovered from the recession and our substantial losses of manufacturing jobs. Income stagnation prevails and Lima’s median household income at roughly $28,000 per annum remains substantially below the Ohio and national levels. We cannot afford to lose ground!

Please know we are in attainment with our current ozone levels in Allen County at 73 ppb. We have worked hard to get to this point, and while we are committed to practical improvements, there simply are no easy solutions at this point. This is principally because the major sources of ozone are related to traffic and motor vehicles, i.e., Interstate 75, State Route 30, railroads, and farm vehicles. Primary ozone sources are not related to manufacturing. Yet drastic new mandates to reduce ozone would cause manufacturing job losses and the loss of city, state and federal revenues. Further, they would make it much more difficult for us to encourage new manufacturing operations and relocations here.”

About CRS

The Center for Regulatory Solutions is a project of the Small Business and Entrepreneurship Council, a 501c(4) advocacy, research, education and networking organization dedicated to protecting small business and promoting entrepreneurship. For twenty-three years, SBE Council has worked to educate elected officials, policymakers, business leaders and the public about policies that enable business start-up and growth. For more information please visit: www.sbecouncil.org