In the News

This week, as Congress continues to work to approve legislation that will prevent the lights from going out in Washington, legislators would be wise to leave blocks to EPA’s new clean-air rules out of their negotiations.

While many stipulate that these measures will further deflate an already sagging economy, in reality, they will have little, if any, negative economic impact. In fact, if the rules are allowed to stand, as it seems they will be, their benefit will far exceed their cost.

President Obama’s announced halt to the EPA’s proposal to strengthen ozone standards is problematic, but does not necessarily indicate (as some fear) that the administration is caving on its entire environmental agenda. The move is, however, likely to bolster the “environment vs. jobs” rhetoric that has been used by many on the right against recent EPA public health protections. If other regulations fall under that political steamroller, the country stands to lose billions in public health benefits that can be achieved at minimal costs. The President needs to make sure that doesn’t happen.

Others, however, have argued that tougher ozone standards would save money currently lost when Americans get sick from air pollution.

“Those rules will generate billions of economic benefits in excess of compliance costs,” said Michael Livermore, executive director of the Institute for Policy Integrity at New York University School of Law. “With each year of delay, that means additional costs imposed on the public, included lost productivity, hospital bills, more asthma cases and untimely deaths.”

Recently, a choir of industry voices has risen up in opposition to strengthened controls on smog proposed by the Environmental Protection Agency. As with other recent environmental rules, opponents have made lots of noise about the potential economic harm and job losses, while attempting to downplay the environmental benefits. House GOP members, for example, decried the “potentially devastating impacts of [the EPA’s] proposed new standards on the U.S. economy and jobs.” But these and other alarmist calls all suffer from the same flaw: They’re premised on studies that disregard basic best practices in cost-benefit analysis in order to force their point.

In our struggling economy there are policies that could help boost employment if anyone cared to do so. Reducing distortionary taxes on work, like the payroll tax; helping workers relocate for jobs; or raising the Earned Income Tax Credit—these are all measures that would help improve the labor market and ultimately cut unemployment.

On the other hand, cutting environmental regulations would do little, if anything, to address the jobs crisis and would cost the American public billions in economic benefits.

It turns out that clean air is a really, really good investment. For every dollar that we put into cleaning our air, we get twenty five dollars back in return benefits.

According to a study by the EPA, we spent $53 billion in 2010 on the rules stipulated by the Clean Air Act and reaped $1.3 trillion in benefits from things like increased property values and avoided pollution-related deaths and doctors visits.

Scott Holladay over at Fast Company wrote up a very comprehensive rundown on the math behind the figures, click over and give it a read.

Of course, since the EPA was created in 1970, the U.S. has seen recessions, bubbles, flush times, and dire straits. But not one of these macro episodes was caused by anything the EPA has done. Instead, they were caused by financial crises, like the 2007 mortgage crisis and the savings and loan crisis in the late 1980s, or external shocks, like the 1970s oil embargo (made all the worse by the country’s addiction to gasoline).

But whenever the economy declines, the same anti-environmental rhetoric is trotted out, with those on the right calling the EPA a bunch of “hot shot junior lawyers and zealots” (Stockman, 1980s), or even worse, “the Gestapo of government” (Tom DeLay, 1990s), and accusing the agency of wanting to “put the American economy in a straightjacket” (Joe Barton, 2010s).

How many times must these dire predictions about economic doom from environmental protection be proven untrue before we collectively stop listening?

This week, the Washington Times ran an op-ed by Steve Milloy in which he asks the EPA to “show him the bodies” of victims of polluted air. He questions whether the agency has “tangible evidence” that emissions from power plants are “causing actual harm to real people.”

It is tempting to go line by line through the piece debunking each point. But Milloy makes a specific request to see “bodies,” and sadly, that is easy enough to show him.

When faced with regulation, industry will generally choose the cheapest way to comply. As long as they achieve stringent pollution goals, this is a good thing: Economically efficient rules get less resistance and blowback than those that create unnecessarily heavy burdens on business.

So it makes sense for EPA to choose more flexibility whenever legally possible. But in upcoming proposals to control greenhouse gases, some signs point to a political calculation that may steer the agency away from this tactic.

Michael Livermore, the executive director of New York University’s Institute for Policy Integrity, said it would be a mistake to give that up just because critics would raise the specter of cap and trade.

“If we ever want to get serious about greenhouse gas reductions, it will include these kinds of things,” Livermore said in a recent interview. “We’re not going to, as a society, impose double costs completely unnecessarily because of some silly rhetorical issue. I think it will get figured out.”

An upcoming review of federal air pollution rules for nitric acid plants could be an early chance, his group said in a recent report.