Ozone Rule Could Cost Wisconsin Families $1,180 per Year and Result in 52,000 lost Wisconsin Jobs
WMC’s Vice President of Government Relations Scott Manley explains why the EPA proposal could cost Wisconsin
MADISON – The state’s chamber of commerce, WMC, is publicizing a new study by its partner the National Association of Manufacturers (NAM), which finds that the Obama Administration’s upcoming revisions to the Environmental Protection Agency’s ground-level ozone standards could amount to the most costly regulation in Wisconsin’s history.
The study, conducted by NERA Economic Consulting, finds that an ozone standard of 60 parts per billion (ppb) could cost the U.S. economy $270 billion annually, put millions of American jobs at risk, and drastically increase the cost of energy for both manufacturers and households.
The impact in Wisconsin would be significant. The NAM/NERA study finds that revised ozone standards could cost Wisconsin:
- $56 Billion Gross State Product Loss from 2017 to 2040
- 52,031 Lost Jobs or Job Equivalents per Year
- $25 Billion in Total Compliance Costs
- $1,180 Drop in Household Consumption per Year
- Up to a 15 Percent Increase in Household Electricity Prices (National Average)
- Up to a 32 Percent Increase in Household Natural Gas Prices (National Average)
- Shutdown of 49 Percent of Wisconsin’s Coal Fired Generating Capacity
“The DNR recently declared Wisconsin’s air to be the cleanest it’s been in decades yet overnight the EPA would be proclaiming most counties to be polluted and then leveling a blanket ban on new manufacturing facilities or expansions,” said Eric Bott, Director of Energy and Environmental Policy for WMC. “All those currently focused on the outsourcing debate in Wisconsin should pay attention as this is precisely the type of heavy handed government intrusion into the economy that drives jobs overseas.”
The EPA is expected to promulgate a proposal for a revised National Ambient Air Quality Standard (NAAQS) for ozone in December 2014. In its most recent draft policy assessment, the EPA indicated that it will consider revisions of the current standard to 60 ppb. WMC has analyzed the DNR’s preliminary air quality monitor data for the past three years and found that all but one of Wisconsin’s monitored counties would trigger a violation of a standard set at 60 ppb.
“If EPA moves forward as planned, virtually the entire state, and nation, would be found to be in nonattainment,” said Bott. “If that happens, Wisconsinites can expect to pay more to drive their cars, more to heat their homes, and more to keep the lights on to the tune of nearly $1,200 per year.”
Non-attainment designations for ozone carry hefty penalties from the EPA. They can lead to vehicle inspections, boutique fuel blend mandates, severe limitations on permits for new or expanding manufacturing facilities, and expensive compliance mandates that translate to increased utility prices.
“This study shows the exorbitant costs that come with a more stringent ozone standard, and the detrimental impact it would have on Wisconsin’s economy,” said Bott. “To make matters worse, many of the precursor emissions that form ozone pollution in Wisconsin, especially along our Lake Michigan shoreline, come from other states leaving Wisconsin with few effective options for further lowering its ozone levels. Under EPA’s plan, Wisconsinites could end up paying the price for someone else’s pollution.”
For more information please see:
The Executive Summary
The Full NAM/NERA report
Wisconsin Specific Information
About WMC: Wisconsin Manufacturers and Commerce (WMC) is Wisconsin’s largest Business Association, representing nearly 3,800 employers in all sectors of Wisconsin’s economy. Roughly one-quarter of Wisconsin’s private sector work force is employed by a WMC member company.
About NAM: The National Association of Manufacturers (NAM) is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 12 million men and women, contributes more than $1.8 trillion to the U.S. economy annually, has the largest economic impact of any major sector and accounts for two-thirds of private-sector research and development.
About NERA: NERA Economic Consulting is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For over half a century, NERA’s economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world’s leading law firms and corporations. NERA brings academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.
RELATED MATERIAL:
Charlie Sykes Interview with Eric Bott, WMC Director of Energy and Environmental Policy (Midday with Charlie Sykes Podcast: 8/6/14)
Interview begins at the 39 minute mark.
###
