A good item out today from our friends with the Clean Air Council in Philadelphia:
New Study Uncovers Additional $10.5 Billion in Annual Benefits and Nearly 80,000 More Jobs from EPA’s Proposed Utility Toxics Rule
Delay Will Impose Billions of Pollution-related Costs on Businesses and Delay Investment in New Generation Resources
July 14, 2011 –Washington, DC – A study issued today finds that the benefits of the Environmental Protection Agency’s (EPA) proposed Utility Toxics Rule (also known as the Utility MACT) are even greater than found in the conservative analysis done by the Agency.
The report, "Why EPA’s Mercury and Toxics Rule is Good for the Economy and America’s Workforce," authored by Charles J. Cicchetti Ph.D, a senior advisor to Navigant Consulting, Inc., finds that the Utility Toxics Rule will produce net benefits of up to $139.5 billion and create 115,520 jobs. The report shows that while the EPA’s benefit-cost analysis made reasonable calculations of the benefits of hazardous air pollutant (HAP) reductions, the Rule brings additional benefits that EPA did not monetize but should be considered.
"Although the EPA’s Regulatory Impact Analysis already shows that the benefits of the proposed Toxics Rule dwarf its costs, I found that it also overestimates compliance costs, contrary to the claims of those calling for additional study and delay," said Cicchetti. "In my analysis of both the Toxics Rule and what is now being called the Cross-State Air Pollution Rule, I have identified a combined additional $16.5 billion in annual benefits to help the economy recover, including additional labor cost savings from avoided lost work days, reduced health and insurance costs, and increased employment."
Report findings on the Utility Toxics Rule include:
Net annual benefits between $52.5 and $139.5 billion ($10.5 billion more than EPA’s analysis)
Net job increases of 115,520 (79,550 more than EPA’s analysis)
Healthcare savings of $4.513 billion (compared to EPA’s $3.445 billion)
Additionally, EPA’s analysis does not account for the $7.17 billion increase in gross domestic product and the $2.689 billion increase in tax revenues expected to result from the Utility Toxics Rule.
"The Clean Air Rules have been expected for almost 10 years and went through a detailed inter-agency review and cost-benefit analysis a few months ago. Now, under the guise of needing more analysis, some in Congress seek further delay to allow companies to continue to operate power plants without adequate pollution controls," said Joseph Otis Minott, Esq. of the Clean Air Council. "Dr. Cicchetti’s study proves that additional analysis uncovers even more benefits and fewer costs than the EPA’s conservative analysis. It is time for Congress to look out for the American people first and not the minority of power plants owners that failed to install pollution controls. Delaying the Utility Toxics and Cross-State Air Pollution rules harms the economy and the public’s health."
The proposed Toxics Rule would limit emissions of HAPs, including mercury; non-mercury metals such as lead and arsenic; and acid gases such as hydrogen chloride, from coal-fired power plants. The rule is designed to reduce toxic air pollution and safeguard the public from the premature deaths, asthma attacks, heart attacks, hospital admissions and other avoidable illnesses it causes. Most plants comply or are well positioned to timely comply with the rule, but some owners have yet to invest in pollution controls.
"For some population groups, particularly the disadvantaged communities most often in close proximity to coal-fired power plants, exposure to hazardous substances can be poisonous in a direct manner," said Reverend Horace Strand from the Chester Environmental Partnerships (CEP) in Pennsylvania. "Lowering toxic emissions means fewer people dying early, more kids in school and more people able to go to work every day, which is particularly important at a time when so many people are still struggling."
Additionally, while the EPA measured employment losses from the perspective of employees, this report quantifies the losses incurred by employers since they typically pay for sick days and other benefits, in addition to wages for each employee. Beyond paying employees sick leave and related payroll taxes and benefits, employers also incur additional costs due to lost productivity. Also, while EPA included some reduced health and insurance costs in its analysis, it did not consider resulting reduced administrative expenses.
"The health benefits that the EPA’s Toxics Rule will provide are indisputable. When you add in the additional economic benefits of cleaning up or shutting down old, dirty power plants, it’s like paying Americans to have less mercury and acid gases in the air they breathe," continued the Clean Air Council’s Minott. ―As Dr. Cicchetti says in his report, the nation is seldom offered such a starkly obvious public policy choice as EPA’s Toxics Rule."
Given the significant proven health benefits of cleaning the air, EPA did not need to examine additional benefits besides mortality and morbidity for its study. Cicchetti’s study finds that although the health benefits are substantial, EPA does not quantify the overall value associated with HAP reductions arising from increased agricultural crop and commercial forest yields, visibility improvements, and reductions in nitrogen and acid deposition. It also does not account for costs associated with behavior to avoid the adverse health effects of HAP emissions.
"These benefits are in contrast to the excessive costs imposed by continued reliance on increasingly obsolete and uneconomic power plants, many of which are long past their useful lives and can no longer compete with newer cleaner technologies," noted John Kassel, President, Conservation Law Foundation.
In terms of EPA overestimating the compliance costs associated with the Toxics Rule, the study finds that many changes have already been made in the electricity industry to reduce harmful emissions and that costs are likely to be lower due to the country’s natural gas boom.
"This study shows we don’t have to choose between environmental progress and economic gain. EPA’s air toxics standards will create many billions in economic benefits and tens of thousands of new jobs, while protecting public health and the environment," said Howard Learner, Executive Director of the Environmental Law & Policy Center, based in Chicago. "Opponents of these standards have not provided comparable data to justify weakening or delaying them. This study provides valuable information that reinforces now is the time for these rules to be put into place."
For a link to the full report, please visit: www.cleanair.org.
About Dr. Charles J. Cicchetti
Dr. Cicchetti recently retired as the Miller Chair of Government, Business and Economics at the University of Southern California and currently serves as a Senior Advisor to Navigant and Pacific Economics Group. He previously was Professor of Economics and Environmental Studies at the University of Wisconsin, Madison, and Deputy Director of the Energy and Environmental Policy Center at Harvard University. He has written numerous books and articles on both Benefit/Cost Analyses and electricity economics.