Monday, March 17, 2008

EPA Raises Ozone Standards

The Environmental Protection Agency recently lowered the level of allowable amount of ozone in the air from the present standard of 84parts per million to 75. The EPA's independent science advisory panel unanimously recommended a standard of 60 to 70 parts.
John M. Balbus, a physician and the chief health scientist at the Environmental Defense Fund, said, “Clearly at some point you get to a level where additional benefits just aren’t worth it, but I don’t think we’re there at 75.” “The E.P.A.’s own risk estimates show that between 75 and 70, there will be hundreds more deaths and thousands more visits to emergency rooms, and hundreds of thousands of more lost school days,” he said. Tens of millions of people live in counties that do not meet the current standard of 84. And the timetable for meeting the new one could be decades. In practice, standards are ceremonial to a major extent.
Oil and chemical companies lobbied intensely against the new standard claiming it would trigger layoffs and erode U.S. economic competitiveness. Must we damage our health to have a healthy economy?
Regulation does not create costs where there were none before. It is a matter of who bears the costs. Medical treatment is a cost of making chemicals as much as labor or raw materials. Raising the price of a product is a signal for consumers to buy less of some products and more of others (depending on the elasticity of demand). The same business interests that usually claim the economy is self-regulating and will respond to changes in relative prices seem to ignore their preaching in the case of polluting products. A price increase and lower demand for chemicals may decrease the use of resources in their production and increase demand for other goods. Inputs can't move to new uses that consumers prefer without some transaction costs. Perhaps we should admit it and share some of the transition costs of resources trapped in chemical production, rather than let the prospects of these costs paralyze us and prevent the healthy environment that many prefer to having more plastics, etc.
I have some sympathy for Sen. George Voinovich from economically stressed Ohio, but the answer is not to damage our health to maintain the status quo.

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