Study: EPA Toxics Rule could create $10.5 billion in benefits, 80,000 jobs

Washington, D.C., July 14, 2011 — A study issued today finds that the benefits of the Environmental Protection Agency’s 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 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 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.

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.

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.

For a link to the full report, please visit:
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