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Is EPA's Ozone Standard Feasible?

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  • Lutter, Randall

Abstract

The Environmental Protection Agency's estimate of the cost of meeting the new health-based ozone standard is likely to underestimate substantially the actual cost. EPA's cost estimates unrealistically assume that pollution control costs are capped at $10,000 per ton. Yet the required emission reductions in some cities exceed total motor vehicle emissions. By dropping EPA's assumption that control costs are constant, I show that meeting the standard in 2010 would cost nearly $5 trillion in one city, and $70 billion in seven other cities. These cost estimates exceed EPA's estimates of $10 billion per year by orders of magnitude. I also find that the incremental costs of control are likely to far exceed any estimates of incremental benefits. The high cost of meeting the ozone standard strongly suggests that it is likely to be infeasible in several cities. To avoid having EPA set such infeasible standards, Congress should amend the Clean Air Act to require the agency to balance the benefits and costs of regulation.

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Bibliographic Info

Paper provided by Regulation2point0 in its series Working paper with number 412.

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Date of creation: Dec 1999
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Handle: RePEc:reg:wpaper:412

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Web page: http://regulation2point0.org/

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  1. Morgenstern, Richard & Harrington, Winston & Nelson, Per-Kristian, 1999. "On the Accuracy of Regulatory Cost Estimates," Discussion Papers dp-99-18, Resources For the Future.
  2. Aaron S. Edlin, 1999. "Per-Mile Premiums for Auto Insurance," Law and Economics 9902002, EconWPA.
  3. Calfee, John & Winston, Clifford, 1998. "The value of automobile travel time: implications for congestion policy," Journal of Public Economics, Elsevier, vol. 69(1), pages 83-102, July.
  4. Jason Shogren, 1998. "A Political Economy in an Ecological Web," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 557-570, April.
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