Report: EPA Fudged The Numbers To Justify Its ‘Costliest Regulation Ever’

Michael Bastasch | Energy Editor

The Environmental Protection Agency inflated the monetized benefits of a major air quality rule to justify imposing a harsher smog standard on U.S. counties, according to a new report by Energy In Depth (EID).

“EPA’s ozone rule could very well be the costliest regulation in U.S. history,” said Steve Everley, spokesman for the petroleum industry-backed EID. “If a rule of this magnitude is to be imposed, then the EPA should consider providing a far more scientifically robust ‘public health’ basis — one that doesn’t rely on inflated health benefits or a lack of appreciation for the very real economic costs.”

The EPA proposed its costly smog, or ozone, standard the day before Thanksgiving 2014. The agency mandated that ambient smog levels be lowered from 75 parts per billion (pbb) to levels between 70 ppb and 65 ppb. The EPA also solicited comments for an even lower standard at 60 pbb — one which could put almost the entire country out of compliance with the rule and cost $3.4 trillion by 2040.

The EPA said its new smog standard was based on “1,000 studies” published since 2008. The agency argued the rule would also bring $23 billion in monetized net benefits. But EID found that EPA’s monetized benefit calculation is 3,100 percent higher than what the agency calculated in 2011 for the same smog standard.

In 2011, the agency estimated the “net benefits” of a 65 ppb smog standard were only $700 million, which included the “co-benefits” of reducing fine particulate matter. This means that the benefits of reducing smog alone were less than advertised.

In fact, White House regulations czar Cass Sunstein told the EPA that in “some of the agency’s estimates, the net benefits would have been zero” if it weren’t for the co-benefits of reducing particulate matter.

But just three years later, the EPA somehow found their rule had benefits that were 3,100 percent more than they originally thought.

Why the huge increase? The agency said it reviewed “more than 1,000 new studies published since EPA last revised the standards in 2008” to find that benefits from reducing smog levels to 65 pbb increased from $700 million to $23 billion.

EID found that EPA’s ozone health risk report references 263 reports and studies, 70 percent of which were published before 2011 when the agency first calculated the benefits of reduced ozone levels. This means the studies “were part of the broader scientific understanding of ozone when EPA determined the net benefits from a 65 ppb standard were essentially zero.”

EID’s report also found that as many as 558 counties would be out of compliance with the EPA’s lower smog standard. A report from the American Action Forum found that 100 national and state parks would be out of compliance with a lower smog standard — not exactly centers of industry.

The EPA did not immediately respond to The Daily Caller News Foundation’s request for comment.

Update: The EPA’s response to EID’s study is below.

“EPA cannot speak to the report. The standards the agency has proposed are about informing the American public about their air quality, so they can protect themselves and their families and we can take steps as a country, over time, to achieve healthy air for all.  They are about recognizing and being transparent about what the science says about protecting public health, and it is about following the law, which does not allow us to consider costs in selecting the level of the standard.”

“The Clean Air Act requires EPA to review national ambient air quality standards (NAAQS) every five years to determine whether they remain “requisite to protect public health with an adequate margin of safety,” based on the latest scientific evidence on ozone and health. That evidence has expanded significantly since EPA last updated the standards in 2008 and shows the current standard is not adequate.”

“People may debate what achieving these, or any other standards, will cost.  The fact is that history shows that we do not have to choose between a healthy environment and a healthy economy: for more than four decades, EPA and state, tribal and local air agencies have improved air quality by nearly 70 percent, while our economy has more than tripled.  And we know that the costs EPA has estimated in its analysis– costs that history shows are likely to be lower than we have projected– are exceeded by the expected benefits to American families and workers.”

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