This article proposes reforms for the new source review program under the Clean Air Act, which provides important health and environmental benefits but has become a significant impediment to the growth and modernization of the US manufacturing sector.
This article examines the complex Clean Air Act program known as new source review (NSR), which affects virtually every major manufacturing facility and power plant in the United States. The NSR program provides important health and environmental benefits but has become a significant impediment to the growth and modernization of the US manufacturing sector. Because of a new, more stringent air quality standard for ozone, the resulting changes in the NSR program may effectively prevent industrial development in some parts of the country. The authors propose administrative reforms that the US Environmental Protection Agency could take to address some of the major concerns about NSR while still maintaining the environmental benefits of the program: (1) replace current deterministic, upper-bound modeling requirements with a probabilistic approach to air quality modeling; (2) expand the pool of emission reduction credits that may be used to offset emissions from new or expanded facilities; and (3) take actions to facilitate NSR permitting when there are changes to national ambient air quality standards. The authors also offer two potential statutory reforms.