Full Title: Economic Impacts of a 65 ppb National Ambient Air Quality Standard for Ozone
Author(s): David Harrison and Anne E. Smith
Publisher(s): NERA Economic Consulting and National Association of Manufacturers
Publication Date: 02/2015
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This study evaluates the potential compliance costs and impacts on the U.S. economy if the U.S. Environmental Protection Agency (EPA) were to set a National Ambient Air Quality Standard (NAAQS) for ozone of 65 parts per billion (ppb). Employing our integrated energy-economic macroeconomic model (NewERA), we estimate that the potential emissions control costs could reduce U.S. Gross Domestic Product (GDP) by about $140 billion per year on average over the period from 2017 through 2040 and by about $1.7 trillion over that period in present value terms. The potential labor market impacts represent an average annual loss employment income equivalent to 1.4 million jobs (i.e., job-equivalents).
These results represent updated values from the results in our July 2014 report, which developed estimates of the potential costs and economic impacts of achieving a 60 ppb ozone standard using the best information then available. In November 2014, the U.S. Environmental Protection Agency (EPA) released updated emissions and cost information supporting their proposal to revise the ozone standard (EPA 2014a); we have used that new information to update our analysis. Also, given that the proposed rule suggests setting a revised ozone NAAQS in the range of 65 ppb to 70 ppb, in this update we assess the economic impacts of a potential 65 ppb ozone NAAQS. This report begins with a summary of the differences between the information and methodology in our July 2014 report and those used in this updated study. It then provides summaries of our estimates of the costs and economic impacts of attaining a potential ozone NAAQS of 65 ppb.