Firms Push for Some Breathing Room

As Congress winds down before adjourning next month, small-business interests are pushing desperately for one last piece of legislation aimed at putting the brakes on stringent new air pollution control standards.

HR 1984, a bill sponsored by U.S. Rep. Ron Klink (D-Pa.), would impose a four-year moratorium on implementation of new regulations for ozone and particulate matter. Currently states must come up with rules to meet the standards by 2002.

The Environmental Protection Agency says the new regulations would prevent 15,000 deaths a year from respiratory and cardiac disease, 25,000 asthma attacks and 60,000 cases of chronic bronchitis, and save up to $120 billion, mostly in medical bills.

To fight such a laudable goal would seem, at first glance, to put small business in league with the dark side.

Although bureaucrats say the air in the Los Angeles Basin is cleaner than ever, it still stings our eyes, clogs our sinuses and scratches our throats. Smog gives downtown Los Angeles a perpetual grainy look, so great for film noir and so bad for living, breathing creatures.

So why would small business line up with million-dollar oil companies and utilities to fight air pollution controls?

One reason is cost.

Nationwide, the cost for the new controls is projected at up to $37 billion annually, according to the White House Council of Economic Advisors and the EPA. The cost to thousands of small businesses in affected industries is expected to reach 3% of their individual net sales, according to the EPA. Businesses that would be affected include manufacturers of plastic or chemical products and those that work with heated metals. Also affected would be printers, construction companies, road builders, companies that lay asphalt and firms with fleets of vehicles.

The other reason is fairness.

The Small-Business Regulatory Enforcement Act, which became law in March 1996, requires that before proposed rules are published, the EPA get input on how small businesses will be affected. The EPA ignored the act in devising the new rules, contends National Small Business United, a nonprofit small-business organization that filed a lawsuit against the EPA in September.

The EPA argues that small businesses would be affected only marginally by the new regulations.

Under the new rules, emissions of ozone (the smog formed when sunlight reacts with nitrogen oxide and volatile organic compounds) must be reduced to 0.08 parts per million averaged over eight hours, compared with the current standard of 0.12 parts per million averaged over an hour.

Particulate matter (small bits of carbon, acids, nitrates and other substances) would be reduced to no more than 2.5 microns in size, compared with the 10-micron standard now. (A human hair is approximately 100 microns in diameter.)

But the EPA says the regulations require a lengthy state-by-state implementation procedure that ends in 2012, when local jurisdictions must meet the standards. By that time, technology to meet the new controls will have been devised or will have become cheaper.

To bolster faith in technology, EPA officials point to the example of sulfur dioxide emission controls, which help prevent acid rain. Estimates in 1990 were that power plants would pay $1,500 for every ton of emissions reduced. Currently, that cost has fallen to $78 per ton.

Second, the EPA says a new agreement worked out by a coalition of 37 northeastern states, the Ozone Transport Assessment Group, means that cleanup efforts by large manufacturers and utilities will clean the air so well that small businesses won’t have to meet the standards.

Finally, the agency argues that it did not violate the act because it did not propose new rules, but simply modified existing ones.

This rather technical and legalistic debate over new air pollution controls is generating lots of grass-roots concern from small businesses, said David D’Onofrio, an NSBU staff member in Washington.

For example, one small-business group in Cleveland sent out a mailing on the issue to 2,000 of its members and received 750 letters back.

“You don’t normally see that kind of response unless it’s tax issues,” D’Onofrio said. “A lot of people feel the EPA is starting to overstep its bounds.”

Even so, HR 1984 and a similar measure in the Senate to stop the new air pollution rules appear dead in the water for lack of Democratic support. Democrats are unlikely to agree to a measure that would block new air pollution controls, because measures supporting controls are generally popular with voters.

Perhaps what is needed is not last-minute legislation to block air cleanup rules, but aid to smaller businesses in the form of federal and state tax credits for air pollution control equipment or procedures.

“A tax credit would incentivize people to [install equipment], and more companies could come into compliance,” said Helen Anderson, owner of Rayvern Lighting Supply Co. in Paramount, who suggested the tax credits at a recent Small Business Administration hearing.

Grants for environmental technology work are already provided by the federal government through the Energy and Transportation departments, as well as the EPA. Although no tax credit proposal is on the table, such a measure could help cut through the clean-air-versus-business debate that is at the heart of the new controls.

“The general principle in which we move forward in air pollution is that clean air is a common good, and industry has no right to pollute the air and jeopardize public health,” said one mid-level EPA official, perpetuating the good-guys/bad guys tone the debate often takes.

A tax credit would recognize that business also has an interest in clean air but needs some help, particularly small businesses without the resources of large corporations. Small-business owners might feel they are getting some aid from the government in a joint effort to meet pollution controls, instead of being forced to meet increasingly strict regulations and blamed for the quality of the air.

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Clearing the Air on Savings and Cost

* The Environmental Protection Agency says new regulations for ozone and particulate matter would prevent 15,000 deaths a year from respiratory and cardiac disease, 25,000 asthma attacks and 60,000 cases of chronic bronchitis and would save up to $120 billion, mostly in medical bills.

* Estimated cost for the new controls would be as much as $37 billion a year, according to the White House Council of Economic Advisors and the EPA. The cost to thousands of small businesses in affected industries is expected to reach 3% of their individual net sales.

Sources: Environmental Protection Agency, White House Council of Economic Advisors