In December 2011 the U.S. Environmental Protection Agency (EPA) announced the Mercury and Air Toxics Standards (MATS), the first national standards for mercury, arsenic, acid gas, nickel, selenium, and cyanide emissions from power plants under the Clean Air Act Amendments, signed by President Bush in 1990.  The EPA says that MATS and the Cross-State Air Pollution Rule (CSAPR), issued earlier this year, are the most significant steps to clean up pollution from power plant smokestacks since the Acid Rain Program of the 1990s.  Power plants have three years to comply, though there are provisions in special cases for four years or even longer to achieve compliance. An associated Presidential Memorandum directs EPA to implement the MATS in a cost-effective manner that ensures electric reliability.

Primary economic benefit

The EPA also released a regulatory impact analysis (RIA), which concludes that the primary economic impact of MATS is on health and quality-of-life. The improvements to health and quality of life stemming from the proposed rule changes would be very large and make the regulatory change worthy of support in and of itself. Specifically, the EPA estimates that adoption of the proposed toxics rule would lead to the  outcomes:

• 6,800 to 17,000 lives saved (which the EPA describes as “avoiding premature mortality
• 11,000 fewer heart attacks
• 12,200 fewer hospital and emergency room visits
• 225,000 fewer cases of respiratory symptoms
• 850,000 more work days (because workers are healthier)

The value of these and certain other health benefits would amount to $55–146 billion per year, exceeding the $11.3 billion annual cost of the program.

Employment impact

The RIA also attempted to estimate changes in employment in the directly regulated industry (utilities) and the increased demand for labor from the construction and installation of pollution abatement and control (PAC) equipment.  However, according to a study by the Energy Policy Institute (EPI), the EPA’s RIA is not close to an exhaustive review of how MATS would affect overall labor demand.

The EPI report is intended to give a more complete picture of MATS’ effect on employment.  The major effect would be job growth spurred by new investments in pollution abatement and control,  as well as by small increases within the utility sector itself. Furthermore, gains from job growth would be amplified through re-spending effects, as those who gain jobs increase their consumption thereby generating jobs throughout the economy.

The major findings of the report are that MATS would have a positive net impact on overall employment, likely leading to the creation of 28,000 to 158,000 jobs between now and 2015.

• The employment effect of MATS on the utility industry itself could range from 17,000 jobs lost to 35,000 jobs gained
• MATS would create between 81,000 and 101,000 jobs in the pollution abatement and control industry.
• Between 31,000 and 46,000 jobs would be lost due to higher energy prices leading to reductions in output.
• Assuming a re-spending multiplier of 0.5, and since the net impact of the above impacts is positive, another 9,000 to 53,000 jobs would be created through re-spending.