Last January 14th, the Environmental Protection Agency published a final rule in the Federal Register updating the National Ambient Air Quality Standards (NAAQS) for particulate matter. The rule reduces by 20 percent the allowable annual concentrations of fine particles less than 2.5 micrometers in size (PM2.5), from the current 15.0 micrograms per cubic meter (μg/​m3) that was affirmed in 2006, to 12.0 μg/​m3.

According to the EPA, meeting the standard “will provide health benefits worth an estimated $4 billion to $9.1 billion per year in 2020—a return of $12 to $171 for every dollar invested in pollution reduction.” This is such an impressive return on investment that it raises the question why the EPA chose a standard of 12.0 μg/​m3 when, by its logic, a tighter standard would yield even greater returns.

The Clean Air Act directs the EPA administrator to set standards “requisite to protect the public health…, allowing an adequate margin of safety.” The U.S. Supreme Court has confirmed the EPA’s interpretation that this statutory language precludes consideration of any impacts other than direct health effects from pollutant exposure. Thus, the EPA administrator cannot consider the costs of meeting the standard in determining what levels are “requisite to protect public health” with an “adequate margin of safety.”

According to the EPA’s final Regulatory Impact Analysis (RIA) of the new rule, meeting the 12.0 μg/​m3 standard will avoid between 460 and 1,000 premature deaths per year. However, the analysis also indicates that further tightening—going from a standard of 12 μg/​m3 to 11 μg/​m3—would yield additional life savings of 1,040 to 2,300 mortalities per year. Given the EPA’s statutory mandate, it is puzzling that outgoing administrator Lisa P. Jackson chose to set a standard that leaves so many lives unprotected.

Two explanations for this puzzle are possible. One is that, contrary to her statutory directive, Jackson considered the costs of achieving the tighter standard (estimated at an additional $320 million to $1.7 billion per year) and decided they outweighed the incremental benefits. This seems unlikely, however, since the EPA’s RIA claims that achieving the tighter 11 μg/​m3 standard would yield health benefits far in excess of costs and result in net benefits of between $10 billion and $29 billion per year. The net benefit test required by President Obama’s Executive Order 13563 would lead Jackson to the 11 μg/​m3 standard, if not an even tighter one.

The other possibility is that Jackson recognizes these benefit estimates are greatly overstated. The predictions of lives saved are highly uncertain, and they hinge on unsubstantiated assumptions about the causal relationship between exposure to PM2.5 and premature mortality. Observers have suggested the EPA’s estimates of the mortality effects of PM exposure overstate actual effects by a factor that could well exceed 1,000.

In contrast to these implausible benefits, the costs of achieving the NAAQS are real, with the standards requiring expensive control measures and hindering economic growth and productivity in regions that are designated non-attainment. While the EPA cannot consider the opportunity costs of complying with the standard, it should be more honest in its examination of the health effects the standard seeks to reduce. A more realistic assessment would probably indicate that requiring states to comply with the new standard is not requisite to protect public health with an adequate margin of safety.