New study examines negative economic consequences of new Biden administration environmental regs

A new study from Oxford Economics reveals the economic consequences of new air quality standards that have been proposed by the Biden administration.

The Environmental Protection Agency in January proposed more stringent air quality standards relating to PM2.5, or fine particulate matter. By tightening the annual threshold PM2.5 standard from a level of 12 micrograms per cubic meter to a level between 9 and 10 micrograms per cubic meter, the administration is hoping to create cleaner, safer air. The administration has even considered tightening the restrictions further, to 8 micrograms per cubic meter.  

Critics, including job creators, say the top-down regulation will come at a cost.  

“We all want clean air, but this new rule to regulate fine particulates known as PM2.5 could serve to regulate many of our Arizona manufacturers, agricultural interests and other entities out of business,” Arizona Chamber of Commerce & Industry President and CEO Danny Seiden said. “At a time when employers face rising inflation and fuel costs and a tight labor market, more regulatory red tape only means higher costs for businesses and Arizona families.” 

This proposal is likely to create many problems for state economies, including Arizona. The EPA regulation will cause a ripple effect that will jeopardize American competitiveness in manufacturing on the global stage, slow down future investments in innovation, and slow market growth, creating job loss and hindering future job growth.  

The Oxford study, commissioned by the National Association of Manufacturers, breaks down the potential impact, showing that these new regulations stand to put 852,100 to 973,900 current jobs at risk, both in manufacturing and in supply chains.  

The study also estimates that up to $197.4 billion of economic activity will be impacted by this change.  

A state or county that does not meet the federal standard to some degree enters into what’s called “nonattainment”. Consequences for a region in nonattainment include the potential loss of ability to permit new businesses and locally control and plan for air quality measures. Nonattainment eventually leads to limitations to expansion and investment in new businesses and stifles the economic outlook in a region. 

By tightening air quality standards, the EPA makes it much more difficult to avoid nonattainment, which will inevitably stifle business growth. In fact, the report projects that the United States stands to lose an additional $138.4 billion in output and 501,000 jobs through 2027.  

While the report warns of potential risks, it also highlights the ways in which the manufacturing and business sectors have innovated and contributed to solutions that improve air quality.  

“U.S. manufacturing industries are often environmentally cleaner than the global average,” the report explains. “If environmental regulations cause U.S. manufacturing output to contract, this will lead to a greater reliance on importing products manufactured overseas. This could have the unintended effect of increasing air pollution and greenhouse gas emissions globally.” “This analysis makes clear these new regulations will weaken our ability to invest in the technology and processes that would continue to reduce emissions—while jeopardizing high-paying manufacturing jobs,” NAM President and CEO Jay Timmons said. “We need to let manufacturers do what they do best: innovate and deploy modern technologies to protect the environment, while creating jobs and strengthening the economy.”

Abby McLain

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