STUDY: Louisiana Faces Economic Harm From New EPA Ozone Standard

Louisiana manufacturers and residents could face significant economic consequences if the Environmental Protection Agency (EPA) moves to lower its ground-level ozone standard later this year, according to a new study conducted by NERA Economic Consulting for the Louisiana Association of Business and Industry (LABI) and the National Association of Manufacturers (NAM).

The study finds that a new EPA ozone standard set at 60 parts per billion (ppb) – below the current standard that many states are still working to meet – could cost trillions of dollars. At these costs, a new ozone standard could be the most costly regulation in the nation’s history.

“New technologies in the manufacturing and energy sectors are making Louisiana more competitive for investment than ever before. We now employ more than 2 million people for the first time in our state’s history and that growth is only beginning, in large part thanks to a strong energy and manufacturing sector,” said LABI President Stephen Waguespack. “This rule would undermine our work to expand Louisiana’s economy and train a qualified workforce for the jobs of tomorrow.”

In Louisiana, a new federal ozone standard could put 117,000 job equivalents at risk annually and cost the state’s businesses $189 billion in added compliance costs, according to the study. A stricter ozone standard could also reduce U.S. Gross Domestic Product by as much as $3.4 trillion through 2040 and dramatically increase energy costs across all sectors.

  • $53 billion in Gross State Product loss through 2040
  • 116,983 fewer Louisiana jobs (or job equivalents) every year through 2040
  • $189 billion increase in total compliance costs across all state sectors from 2017-2040
  • $2,360 more paid by Louisiana households annually in the form of lost consumption
  • Up to 32 percent increase in household natural gas prices and up to 15 percent increase in household electricity prices nationwide
  • Estimated shutdown of 80 percent of Louisiana’s coal-fired generating capacity

“Manufacturing in the United States is making a comeback, and we’re reducing emissions at the same time, but tightening the current ozone standard to near unachievable levels would serve as a self-inflicted wound to the U.S. economy at the worst possible time,” said NAM President and CEO Jay Timmons.

With so much at stake for business, the manufacturing sector and consumers from new ozone requirements, LABI has joined forces with NAM to increase understanding of the issue and its impact through an educational campaign that will run through fall. To kick off the conversation, NAM has produced a new video discussing the creation, transport and regulation of ground-level ozone.

To read the executive summary of the study, click here. To read the full report, click here.
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