CASAC: The Undemocratic Institution That Threatens the American Economy

by William Yeatman on April 16, 2014

in Blog

Yesterday, the National Association of Manufacturers announced the launch of an ad campaign targeting EPA’s pending revision of the national ozone standard. The pitch, which I’ve re-posted immediately below, is running in 10 States: Arkansas, Colorado, Minnesota, North Carolina, Virginia, Iowa, Michigan, West Virginia, Kentucky, Ohio, and Missouri.


The National Association of Manufacturers has every reason to fear the ozone rule, as do all Americans. The minimum standard that EPA is considering would trigger the Clean Air Act’s ultra-onerous “Part D” controls for 75% of the country; at most, this unfortunate fate would befall 96 % of the country. By EPA’s own accounting, the regulation could cost up to $90 billion a year—even though the agency concedes that only $23 billion in ozone emissions controls is known to exist. To clarify, this means that the rule could necessitate the creation, out of whole cloth, of almost $70 billion a year in control technologies.

But it’s not EPA’s fault! In fact, the agency doesn’t have the discretion to set the ozone standard. Instead, this responsibility is given to an insular group of advisers, the seven-member Clean Air Science Advisory Committee (CASAC). There are trillions of dollars at stake—that’s TRILLIONS, with a T—yet CASAC is in no way accountable to U.S. voters. Indeed, virtually no voters know of this group’s existence.  Worst of all, CASAC is uniquely ill-suited to designate a standard for a non-threshold pollutant like ozone, due to a professional bias. In this post, I will explain briefly this undemocratic, yet ultra-powerful, institution of environmental policy-making.

Under the Clean Air Act, EPA must establish a national standard for ambient air concentrations of ground-level ozone at a level “requisite to protect public health.” This national ozone standard must be reviewed and, if necessary, revised every five years. In 1977, the Congress established CASAC to provide “independent” advice to EPA on the setting of national standards for pollutants like ozone. CASAC’s seven member board is nominated annually, primarily from the ranks of epidemiologists and public health officials.

Of utmost importance, the Clean Air Act makes clear that costs cannot be taken into account when EPA chooses an ozone NAAQS; rather, the decision must be solely science-based. The D.C. Circuit Court of Appeals, which is the exclusive court of review for national ozone standards, has interpreted this directive from Congress such that, in practice, EPA cannot deviate from CASAC’s advice on where to set the standard. This is key: In establishing an ozone standard “requisite to protect public health,” EPA is effectively bound by CASAC. To be clear, CASAC’s power isn’t clearly derived from the Clean Air Act. Instead, its power rests on judicially-created rules, akin to federal common law. See, generally, American Farm Bureau v. EPA, 559 F. 3d 512 (D.C. Cir. 2009).

In any case, the D.C. Circuit’s empowerment of CASAC is hugely problematic, given the nature of ozone pollution. There is, in fact, no threshold at which ambient air concentrations of ozone ceases to have an effect on human health. To be sure, we’re not talking about mortality in the U.S.; Instead, there’s evidence that ozone is a non-mortal irritant to sensitive populations in rough proportion to air concentrations. The upshot is that there’s no obvious line to draw at which there is zero impact; rather, it’s a continuum.

This wouldn’t be as problematic if the EPA, as a function of the (popularly-elected) Presidency, could take costs into account, and render a discretionary choice. But that’s not the case. Instead, the decision is left to CASAC, at the direction of the D.C. Circuit Court of Appeals.

CASAC’s vast power is troubling. It is staffed almost exclusively by public health researchers and officials, most frequently epidemiologists, and this presents an obvious conflict of interest: Their professional careers are inextricably linked to their recommendations. If you’ve ever listened to a lecture by epidemiologist engaged in public health issues, he or she invariably will end the presentation by noting the profound public-policy implications of his/her work. Bluntly put: It is career-affirming for members of CASAC to base policy on their research. And that’s precisely what we’ve seen. According to a recent report compiled by Rep. Lamar Smith, members of CASAC’s Ozone Review Panel recently cited their own work more than 700 times (an apparent violation of EPA rules).

Above, I explained how ozone is a non-threshold pollutant, and I also described how CASAC suffers a professional bias in favor of regulation. Now consider these factors in combination. Because there is no obvious ambient air concentration of ozone below which public health is no longer impacted, and given the professional incentives at work for CASAC members, it is much more likely than not that the advisory group will find that a more stringent level is necessary, whenever the ozone standard comes up for review.

And that’s exactly what’s happened. In 1997, the Clinton administration found that public health was protected, with an adequate margin of safety, when the national ozone standard was set at 80 parts per billion. From 1997 to 2007, ozone pollution decreased. One could reasonably think that there is no reason to revise the standard, if it had been set at a level to protect public health, and pollution decreased. And yet, in 2007, the Bush administration lowered the ozone standard to 75 parts per billion. Now, CASAC is recommending 60 to 70 parts per billion. Even were EPA to choose the most stringent standard—60 parts per billion—there is no doubt in my mind that CASAC, when it next reviews the standard in 5 years, will recommend an even lower threshold, costs be damned.

The economic impact would be devastating, and that’s no hyperbole.  As I noted above, EPA estimates a tightened ozone standard could cost up to $90 billion a year. Industry suggests it could cost $1 trillion annually. The economic effects are so severe because the regulation would plunge virtually the whole of the country into ozone “non-attainment” (See map below). In practice, a non-attainment area cannot add any ozone emissions without offset this increase by decreasing a commensurate amount of emissions. This is basically a de-industrialization mandate, which is the last thing the U.S. economy needs. Alas, there may be nothing that a single elected official could do to stop it.


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