Local leaders see losses in billions from clear air plan.

Hearings on EPA proposal are set to begin this week

A sweeping federal clean air plan for the L.A. Basin could cut regional air travel 35 percent to 60 percent by the year 2005, causing the Southland to lose $27 billion to $39 billion a year, according to a study by the Los Angeles Department of Airports.

That negative economic impact is only one of a slew of dire economic consequences the Southland will suffer if the U.S. Environmental Protection Agency adopts its plan to clean up the air in the L.A. Basin, according to local business leaders.

Business and government leaders will get their first chance to comment on the plan at a public meeting to be held by the EPA at the South Coast Air Quality Management District headquarters in Diamond Bar on July 18.

The plan, called the Federal Implementation Plan, proposes regulations aimed at reducing emissions from airplanes, ships and trains -- air pollution sources which have been subject to little or no regulation.

Maurice Laham, environmental manager for the Los Angeles International Airport, told the Business Journal last week that airport officials have been working with an outside consultant on a study of the economic consequences of the plan.

That study shows that when the plan is fully implemented in 2005, the L.A. area economy could lose from $27 billion to $39 billion a year, from the reduced number of travelers.

The dollar range of the economic impact depends on whether air travel will drop by 35 percent, as the EPA contends, or 60 percent, as the trade group representing the airlines contends, Laham said.

Ray Remy, president of the Los Angeles Area Chamber of Commerce, said the plan is expected to pose major economic problems for the trucking, shipping, airline, oil and other industries.

"There are so many places to be concerned (about negative economic impacts), it's like a mosquito going into a nudist camp," Remy said.

The EPA developed the FIP for the L.A. Basin after losing a lawsuit brought by the L.A.-based environmental group Coalition for Clean Air. That suit asked that the EPA develop a plan to allow Southern California to meet the U.S. Clean Air Act.

The EPA was ordered to adopt a plan for an area that includes L.A., Orange, San Bernardino and Riverside counties by February 1995. It would begin taking effect in 1998.

Remy told the Business Journal last week that the L.A. Chamber of Commerce is considering going to federal court for "some relief" from the currently proposed plan. It may seek a delay in the implementation of the plan or flexibility in the regulations in the plan, he said.

He added that the chamber is talking with environmental groups -- including the Coalition for Clean Air, which brought the original lawsuit -- about ways to lessen the plan's economic blows.

"If we decided to go to court, we might ask the coalition to join with us and ask for some flexibility," Remy said.

Dennis Zane, executive director of the Coalition for Clean Air, said he had not received "any specific proposal" from the chamber about legal action.

"We are prepared to discuss any proposal that anyone might submit," Zane said. "But the caveat is that we would want to live up to our responsibility to have clean air."

He said discussions between business groups and environmental groups about the federal air plan have been productive. Zane added that he thinks a lot of the plan's negative economic implications are "avoidable."

Remy said business leaders are concerned the plan also could limit the flow of trade into the ports of Los Angeles and Long Beach. Ships would be required to pay fees to the extent that they could not reduce polluting emissions.

"In the harbor, you're looking at some substantial fines or fees going from $16,000 per vessel per visit to $100,000 per vessel on the high end," Remy said.

"No harbor in the world levies a charge like that on incoming vessels," he added. "It is likely they (the ships) will go to alternative ports (on the West Coast)."

Airport environmental manager Laham contends the plan will also force air travelers who would have used L.A. area airports to use San Diego and San Francisco airports.

Those travelers may then drive to L.A. and cause more air pollution than if they landed at LAX in the first place, Laham said.

"I can't believe they (the EPA) are going to do this thing, but that is the way they're headed," he said. "Somebody has got to tell them the emperor has no clothes."