EPA Clean Air Regulations Save Lives and Money, According to New Study

1990 Clean Air Act Amendments: Direct Benefits and Costs for 2020

Cost Benefit of Clean Air Act Amendments 

1990 Clean Air Act Amendments' primary covered pollutants: ozone, fine particles, sulfur dioxide, nitrogen oxides and volatile organic compounds. ©EPA

A new report, released by the EPA this month (March 2011), analyzes the costs and benefits from the Clean Air Act Amendments of 1990 (CAAA) as they relate to the economy, public health and the environment. It found that the benefits from CAAA regulation far outweigh the costs by a factor of 30 to 1 with high-benefit estimates exceeding costs 90 to 1. Even low-benefit estimates found gains exceed costs 3 to 1. According to the analysis, CAAA will continue to better Americans in the near future; for the year 2020 alone, benefits will reach $2 trillion and save 230,000 people from premature death.

EPA Administrator Lisa Jackson stated, “The Clean Air Act’s decades-long track record of success has helped millions of Americans live healthier, safer and more productive lives. This report outlines the extraordinary health and economic benefits of one of our nation's most transformative environmental laws and demonstrates the power of bipartisan approaches to protecting the health of the American people from pollution in our environment."

Preventions from the 1990 Clean Air Act Amendments

This chart shows the health benefits of the Clean Air Act programs that reduce levels of fine particles and Ozone. ©EPA

An interesting aspect of CAAA is that it instituted the first national cap-and-trade program which reduced sulfur dioxide and nitrogen oxide (primary pollutants for acid rain). The cap-and-trade system for greenhouse gases introduced in various climate and energy bills over the last half decade was modeled after this successful program.

An EPA report from late last year (Dec 2010) concluded that in 2010 alone, the acid rain program provided an estimated $120 billion in public health benefits—40 times the estimated cost. CAAA’s cap and trade program demonstrates how this system can generate pollution reductions through an efficient and market-friendly mechanism.

While these amendments now show enormous benefits to public welfare, when they were first debated naysayers predicted the cost to businesses and the economy would be too great -- much as they have argued against proposed bills to regulate greenhouse gases. Industry fought the acid rain program, saying it would cost many billions of dollars, wreck the Midwest economy (a region dependent on coal-based energy) and cause energy bills to skyrocket. Even the EPA overestimated the cost of the program (estimates were nearly double the actual cost).

The cap-and-trade acid rain program not only cost substantially less than the EPA and industry/business interests predicted, but in 2006 utility rates were 5% lower (in real dollars) than when the act passed. Job loss from the program was also substantially less than projections -- only one-fourth of the predicted job loss in the coal industry actually occurred -- and the primary cause for losses was mostly mechanization.

Industry and special interest groups have a history of significantly overestimating the costs of regulation, scaring the public and legislators. Luckily, in the case of CAAA, smart regulation prevailed, generating two decades of public benefits that are predicted to continue. Unfortunately, special interests have deterred public support and legislators from instituting a system for limiting climate change pollution and scaling up renewable energy; the cost of which will significantly hurt the economy, public health and vital ecosystems and species.

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