COMMENTARY : Challenging the Clean Air Act on Basis of Costs and Benefits : An opponent argues that the act will reduce economic growth, impede competitiveness and force some employers to relocate offshore.

Proclaiming “a new era for clean air,” on Nov. 15 President Bush signed into law the first major revision of the Clean Air Act in more than a decade. Completed in the waning days of the last Congress, proponents of the new law brushed aside the fears of many leading economists, including three Nobel Prize winners, and legitimate scientific doubts concerning the necessity for many of its provisions and passed an enormously complex 749-page statute.

The new law attempts to reduce urban smog, control the alleged precursors of acid rain and reduce the emission of many toxic chemicals.

In light of these concerns, it is fair to ask whether Congress could have adopted a more scientifically responsible and cost-efficient way to achieve the same environmental goals. The answer is an unequivocal “yes.”

First, contrary to the environmentalists’ rhetoric, the air has been getting cleaner under existing law. During the longest and greatest peacetime economic expansion in our history--the Reagan expansion of the 1980s--our economy more than doubled in size, yet emissions of ambient airborne lead declined by 88%, sulfur dioxide emissions dropped by 35%, carbon monoxide by 32%, particulate matter by 21%, ozone by 16%, and nitrogen oxide by 12%. Last year, moreover, the quality of the air in our cities was the best it has been in a decade.

Many prestigious economists believe the costs of the new law far outweigh its benefits.

Recently, three Nobel laureates signed an extraordinary letter in which they described the Clean Air Act amendments as an “unwise, ill-advised patchwork of legislation that should not be enacted.” They added that “there is little evidence that these new regulations would actually improve the quality of the air” and predicted that “the Clean Air Act’s unduly stringent and extremely costly provisions could seriously threaten this nation’s economic expansion.”

Similarly, Michael Boskin, the current chairman of the President’s Council of Economic Advisers, acknowledged that “resources that must be devoted to reducing air pollution are simply not available to produce consumer goods and services or to make investments that would increase productivity.” He predicted that clean air legislation will lower future economic growth, impede international competitiveness and overall productivity growth and force some employers to relocate offshore.

A targeted, market-oriented approach to pollution control can clean the air without causing major economic disruptions. Unfortunately, the new Clean Air Act adopts the opposite approach.

For example, although the urban smog problem in America affects only a few metropolitan areas, the Clean Air revisions will require new-car purchasers everywhere to spend $1,000 on additional pollution control equipment.

Robert W. Crandall of the Brookings Institution, after acknowledging the special problems faced by Los Angeles, notes that “consumers of new vehicles in most other parts of the country are saddled by Congress with ever-tighter controls, even though most of these areas do not need further major pollution reductions.” The principal policy result from Los Angeles’ problem, he concludes, “is ever more expensive cars for residents of Boise and Butte but very little improvements in the smog in Los Angeles.”

Since the passage of the original Clean Air Act, auto makers have removed 96% of tailpipe emissions; the new law will remove an additional 1% or 2%. Instead of increasing the price of a new car for only incremental environmental gains, Congress should encourage consumers to retire their old, dirty cars and purchase new, cleaner ones. In Southern California, several oil companies have taken precisely this approach.

Unocal, for example, will purchase 7,000 pre-1971 cars registered in the Los Angeles basin and send them to the junkyard. Officials estimate that some of these cars exceed current federal emissions standards by a factor of 601. Ironically, the new Clean Air Act will hamper this sort of innovative approach because, by making new cars more expensive, it will induce consumers to continue driving their dirty old cars.

The story behind the enactment of the acid rain control program illustrates how environmental extremists will distort and ignore scientific evidence whenever the facts do not support their preconceived notions.

In 1980, the Congress created the National Acid Precipitation Assessment Program (NAPAP) to study the acid rain problem. At the time, there was widespread concern that acid rain would result in the end of civilization as we know it. The Senate sponsor of the original NAPAP legislation expressed the fear that “over 50,000 lakes in North America will become sterile, perhaps by the end of the decade.” But that was only part of it.

Proponents of the NAPAP study linked sulfur dioxide emissions to declines in crop and forest productivity, death of fish populations, erosion of marble and limestone buildings and other dire effects in areas making up more than half the continental United States.

Ten years and $537 million later, the NAPAP findings are available. Contrary to the fears of most environmentalists, acid precipitation is not responsible for such calamities. For example, the NAPAP scientists found that only 2% of the lake area in the Adirondack region of New York State is acidic. Many of these acidic lakes, moreover, are acidic because of natural factors and have been acidic since pre-industrial times. With respect to the decline in fish population, NAPAP concluded that only one third of that decline can be attributed to acid rain.

The researchers also found that a 50% reduction in sulfur dioxide emissions (approximately equivalent to the 10-million-ton reduction required in the new law) would yield only a 3% decrease in the number of acidic lakes in the Adirondacks.

The scientists also found that it will cost twice as much to remove 10 million tons of sulfur dioxide as it will to remove 8 million tons and, most importantly, that there is no environmental difference between the two.

Remarkably, there was no serious discussion of the NAPAP findings in the Congress. Instead, we have a new law that will stifle any efficient, real reduction in our polluted air and require utilities to spend tens of billions of dollars in pursuit of environmental demons that simply do not exist.