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New Research Says Reducing Ozone Levels Produces Medical Benefits But Manufacturers Say the Rules Are Inflexible

Researchers say that rules affecting smog-forming ozone that went into effect on October 1 will save billions in medical costs each year. Manufacturers counter, however, that the rules are too rigid and need to be rewritten.

“Our research shows that efforts to reduce ozone extend lifespans,” says Michael Greenstone, co-author of a report issued by the University of Chicago’s Energy Policy Institute. “While previous research had suggested this, the especially novel finding here is that pollution reductions lead to significant reductions in the purchase of medications that protect people from becoming sick or even dying prematurely … The implications for air pollution policy are potentially enormous.”

Ozone pollution is the direct result of burning fossil fuels and operating factories. Nitrogen oxide and volatile organic compounds form as a result, leading to ground-level smog. That, in turn, can cause respiratory illness in children and the elderly.

The current ozone rule, which was finalized in 2015 but which just took effect, sets the standard at 70-parts per billion. Under the Bush administration, it had been 75-parts per billion — a rule adopted in 2008. The Clean Air Act requires a review of the law every five years, although it does not necessitate that it be changed.

While the Clean Air Act has done much to reduce smog levels — ozone concentrations — about 40% of Americans still live in areas that do not meet national objectives, the school’s researchers say. What they also found is that when companies are trade credits amongst themselves, they are able to reduce the level of those pollutants. That’s a key takeaway here.

Consider sulfur dioxide: The 1990 Clean Air Act capped the amount of SO2 that can be released into the atmosphere and it allows companies to buy and sell credits to help them reach those goals. Such a plan creates a ceiling and then permits those facilities that are able to meet the requirements the right to bank or sell credits to those that cannot do so. As the ceilings are gradually lowered, pollution rates fall.

Those emissions dropped precipitously at considerably less cost than predicted. The question now is whether this trading scheme could work for other pollutants. Researchers make note of the Cross-State Air Pollution rule that took effect in March and which deals with nitrogen dioxide from power plants and other industrial sources:

“This is the first study that directly documents the health benefits of a cap-and-trade market for pollution, Joseph Shapiro, assistant professor of economics at Yale University said, in the University of Chicago’s release. “Cap-and-trade markets have been used to regulate water and air pollution, climate change and many other environmental problems … This will transform the way policymakers and analysts measure their costs and benefits.”

Manufacturers and oil and gas developers are saying that the 2015 rule that took effect on Oct. 1 is too costly and that they are inflexible — a view generally supported by the US Chamber of Commerce and the American Petroleum Institute. That said, those same groups earned a victory of sorts with regard to the 2015 ozone rule because the Obama team backed off its efforts to lower that standard to as little as 60-parts per billion.

The Trump administration had considered trying to delay those regulations. But in August it decided against taking such action, saying that the issue was just too complex and that this would be an issue to explore in the future.

As it stands now, state and metropolitan governments would need to be in compliance with the 70-parts per billion standard by 2025. If they are not, then the federal government could withhold federal funding for such things as highways. It would be EPA’s job to monitor the market.

In June, however, the US House passed bill to delay the 70-parts per billion standard until 2025. It would be unlikely to garner the 60 votes needed in the US to overcome a filibuster. 

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