Mr. Chairman, Members of the Subcommittee, thank you for the opportunity to appear before you today.
My name is Bill Christopher. I am the Group President of Aerospace, Automotive and Commercial Transportation for Alcoa and also hold the position of Executive Vice President. With over 131,000 employees in 43 countries, Alcoa is the world’s leading producer of primary aluminum, fabricated aluminum and alumina and is a large manufacturer of packaging, transportation and other industrial products. Alcoa holds sustainability as a core value in our business practices. We include goals and metrics for sustainability as key elements of our 2020 Vision for the company. Consequently, in 2005, Alcoa was named one the world’s three most sustainable corporations by the World Economic Forum.
I also serve on the Board of Directors of the Greater Cleveland Partnership (GCP) and appear before you today on their behalf. The GCP is one of the nation’s largest metropolitan chambers of commerce, representing more than 16,000 small, mid-sized and large companies. Because of concern for the region’s economy, the GCP has asked me to provide leadership in efforts to shape business community involvement in clean air compliance discussions.
My message today will focus on the economic impact of imposing standards that are difficult, if not impossible to attain in the short-term. I would like to make four key points; additional information is available in my submitted written testimony.
1. First, I am not here to debate the value of vigorous efforts to achieve cleaner air. There is absolutely no doubt that cleaner air is central to the future health of our residents and overall quality of life. Both my company and the Cleveland business community have demonstrated their commitment to continuous improvement of the region’s air quality.
We are working with the Northeast Ohio Areawide Coordinating Agency (NOACA) in the development of Ohio’s State Implementation Plan for ozone compliance and will also participate in the fine particulate process. We are reaching out to more than 60 local manufacturing companies to educate them about this situation and ask for their assistance in developing innovative and progressive solutions. However, since an estimated 60 percent of Northeast Ohio’s pollutants come from outside our region, neither our sincere voluntary efforts nor regulatory action imposed on our region alone will bring us into compliance.
2. Second, and equally important, our efforts to achieve cleaner air must achieve a delicate balance. They must take into account the potentially significant economic costs to places like Cleveland that are in the midst of painful economic transitions.
3. Third, achieving this balance is complicated because the timelines for meeting the Clean Air Act standards are misaligned with the timelines for several federal standards established to regulate emissions in particular industries. The gaps created by these misalignments add economic costs of compliance that could be devastating in places that rely on manufacturing as a key element of their economies.
According to the National Association of Manufacturers, pollution abatement costs in the United States are equivalent to 1.6 percent of the GDP in the U.S. The cost of abating manufacturing pollution as a percentage of manufacturing output is 7.6 percent in the United States. To put this figure in perspective, the cost in Japan is 3.1 percent, in Mexico 3.1 percent, and in China 1.6 percent.
The stigma of sustained designation as a non-compliance region will have impact on residential and economic growth, in spite of significant improvements in air quality. This chronic condition will create an environment of uncertainty and significant cost that will accelerate the flight of private capital from the region – and most likely entirely out of the country. Companies looking to locate facilities or expand capacity will not even consider communities in non-attainment. We will lose jobs. We will lose entire companies—probably to other countries.
4. Finally, before any new regulations are adopted, regions like Cleveland should be given adequate time to understand the costs of proposed standards and develop strategies that reflect the needed balance. New modeling capabilities, perhaps developed and tested in Northeast Ohio with the assistance of the federal government, can help in this critical task.
Compliance with a more stringent fine particulate standard—in the face of standards misalignment and indeterminate science—before we have even had the opportunity to adequately address the challenges of the current SIP processes – may be physically impossible, if not economically devastating.
I again must emphasize that achieving cleaner air is a goal we all actively support. However, we urge the federal government to move forward with great caution. We ask that you provide regions like Cleveland with adequate time and resources to find a balanced approach that enables us to address these increasingly complex air quality challenges in ways that minimize damage to our economy. Incremental responses with compliance timelines that are not in synch with national industry regulations, such as those aimed at achieving compliance on ozone and fine particulate matter standards, are likely to create huge costs in the short-term and leave our region in a state of non-compliance for decades to come. We respectfully ask that you urge the EPA Administrator to defer action to change the 24-hour fine particulate matter standard at this time and assist Northeast Ohio with evaluating the impact of meeting the current standards.