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Marketplace Morning Report

The EPA’s new smog rules: Cost vs. benefit

David Weinberg Mar 3, 2014
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The EPA is annoucning new regulations on emissions standards for gasoline. The goal is to reduce the amount of sulfur that’s released into the air, something the Obama administration has been pushing for since 2010. The new rules would bring emissions regulations up to the same standards in place in Europe. Gasoline producers say the new rules will cost billions to implement, but proponents counter that the health benefits will eventually save far more money.

New EPA regulations call for reducing the amount of sulfur in gasoline by two thirds. Refineries and automakers have to comply by 2017.

“We will get an immediate public health benefit in 2017, when the cleaner fuel comes onto the market,” says Janet McCabe, the acting assistant administrator for the Office of Air and Radiation at the agency. And by 2030, she says, billions of dollars in health savings from the reduction in sulfur emissions and smog.

The American Fuel and Petrochemical Manufactures, representing refineries, opposes the new regulations, saying they will cost the industry $10 billion and raise the price of gas several cents a gallon. The EPA’s estimate is much lower. The argument over the regulations is a question of how to balance short term costs against long term benefits, an issue that is not without precedent: refineries have already lowered sulfur emissions in fuels, and improvements in health have been seen.

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