NEWS RELEASE                                   SEPTEMBER 2011

How to Determine Whether Obama was Right or Wrong on Ozone?

Was President Obama right or wrong in deciding to abort the proposal to reduce the ambient ozone level from 0.075 ppm to 0.060 or 0.070 ppm?   The answer is neither.  The reason is that there are no absolutes, nor should there be.  Some employed people would have benefited more by the ozone reduction than if the funds were used for other purposes.  Some unemployed people would benefit more if the funds were used in a way that stimulates jobs. But what if there were a solution that both reduced ozone and stimulated job growth?  Fortunately there is.  But the argument for it is based on understanding the important factors in making the best decision.  There are three of them:

1- To make the best decisions we need to discount the present value of future benefits. Ozone regulation will result in benefits some years from now, so it has to be discounted when compared to a similar benefit which would be immediate.  President Obama is telling us that there are some immediate benefits for the funds which are greater than the future ozone benefits discounted to the present.  It is important to realize that the air pollution control effort is progressive.  Here is the history of the ambient ozone rule:

1979:  0.12 ppm (1-hour)

1997:  0.08 ppm (8-hour)

2008:  0.075 ppm (8-hour)

2010 proposal: 0.06 – 0.07 ppm (8-hour)

We have been ratcheting down the ozone levels every 10 to 15 years. This new initiative could logically be promulgated a decade from now rather than during a time of economic crisis. But some would make the argument that the future health benefits are so large, that even when discounted to the present, the value is high. How do we weigh this argument against that made by the President?  We can only do it by developing a common metric to measure all harm and good.

2- Quality Enhanced Life Days (QELD) - the common metric to measure all harm and benefits.  McIlvaine has developed a common metric which is really not unique since it uses the same principles individuals use hundreds of times per day in making life choices. What is unique is that these are identified and aggregated. The result is we can compare QELD for ozone reduction against that of new jobs or alternate uses of the funds. But to do this we still need to rely on one more factor.

3-Important Event Odds Diversion of funds from ozone to job creation is not going to create full employment. Likewise, failure to ratchet down ozone is not going to result in catastrophe. It is important to fairly assess the odds and to create a statistical result which takes into account the uncertainties. This approach is necessary to avoid the confrontational impasses which we see in Congress today.

An Unexpected Conclusion Using all these tools and weighing the options, there is a surprising and serendipitous alternative - Replacement of old coal-fired power plants with new ones.  Any new power plant using ultra supercritical technology will use 30 percent less coal per megawatt/hour than the old power plant.  It will reduce ozone generating contaminants by 30 to 80 percent and it will create more jobs than almost any possible alternative. Best of all there is little or no cost associated with it.  The savings in coal and O&M costs will offset the depreciation on the new capital, so the price of electricity will not have to rise.

It is time for a fresh new approach to our energy and environment choices.  More information on this is found at:  Sustainability Universal Rating System.