Clearing Up the Smog

Synapse Energy Economics analyzes and debunks claims made by NERA Economic Consulting regarding the costs of a proposed 65 ppb ozone standard. Synapse finds that NERA inflated compliance costs by over 700% through flawed assumptions on emission reduction requirements, an inappropriate use of 'cash for clunkers' data to price unknown controls, and significant mathematical errors. Synapse's re-analysis suggests annualized costs of $13.6 billion to $21.6 billion, far below NERA's $155 billion estimate. Additionally, the document argues that NERA's prediction of 1.4 million 'job-equivalent' losses is based on a 'black box' model that does not predict actual unemployment and ignores the economic benefits of pollution control investments.

• NERA significantly overestimated the amount of NOx emission reductions required to meet a 65 ppb ozone standard, increasing the need for 'unknown controls' to 1,000,000 tons compared to the EPA's estimate of 750,000 tons.
• NERA's cost estimates for unknown controls are based on a single, flawed data point from the Car Allowance Rebate System (CARS), or 'cash for clunkers' program, leading to an extraordinary marginal cost of approximately $500,000 per ton of NOx.
• NERA's total annualized cost estimate of $155 billion contains a math error of approximately $70 billion because it double-counts emissions reductions at coal-fired power plants, treating them as both known and unknown costs.
• Applying Synapse's analysis of coal-fired EGU retrofits and replacements to the EPA's methodology yields an annualized cost of $13.6 billion, which is $1.4 billion lower than the EPA's own Regulatory Impact Assessment (RIA) estimate.
• NERA's claim of 1.4 million lost 'job-equivalents' does not represent actual unemployment, as the NewERA model assumes 'full employment' where no jobs are ever lost by definition.
• NERA's economic model erroneously assumes that pollution control investments 'crowd out' other productive investments, ignoring that such spending can stimulate the economy when there is slack in the market.
• The EPA's 2014 RIA valued the health and economic benefits of a stronger ozone standard at $19 to $38 billion annually outside of California and $2.2 to $4.1 billion per year within California, benefits which NERA failed to account for.

APA

Fisher, J., Comings, T., Ackerman, F., & Jackson, S. (2015). Clearing Up the Smog. Earthjustice. https://earthjustice.org/wp-content/uploads/clearing20up20the20smog20-209-10-1520final20version.pdf

Chicago

Fisher, Jeremy, Tyler Comings, Frank Ackerman, and Sarah Jackson. Clearing Up the Smog. Earthjustice, 2015. https://earthjustice.org/wp-content/uploads/clearing20up20the20smog20-209-10-1520final20version.pdf.

Wikipedia

{{cite report |last1=Fisher |first1=Jeremy |last2=Comings |first2=Tyler |last3=Ackerman |first3=Frank |last4=Jackson |first4=Sarah |title=Clearing Up the Smog |publisher=Earthjustice |date=10 September 2015 |url=https://earthjustice.org/wp-content/uploads/clearing20up20the20smog20-209-10-1520final20version.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fisher2015clearing, author = {Fisher, Jeremy and Comings, Tyler and Ackerman, Frank and Jackson, Sarah}, title = {{Clearing Up the Smog}}, institution = {Earthjustice}, year = {2015}, month = sep, url = {https://earthjustice.org/wp-content/uploads/clearing20up20the20smog20-209-10-1520final20version.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }