Wednesday, November 15, 2017

American Prosperity and the Role of Environmental Regulation: Part I

By Natascha Smith, Energy Fellow
U.S. National Archives

Recently, Scott Pruitt announced the EPA’s plans to 'withdraw' the Clean Power Plan. While this step is receiving a lot of attention from the media, the Clean Power Plan is just one of 52 environmental rules that President Trump has sought to reverse since he took office in January. During a visit to the EPA in March, President Trump signed an executive order instructing regulators to rewrite many environmental regulations, stating: “We’re ending the theft of American prosperity and rebuilding our beloved country.” These rollbacks of environmental regulations should come as no surprise, since during Trump’s presidential campaign he made clear that he would like to abolish the EPA.

Since several of the EPA regulations on the chopping block concern critical environmental issues, such as climate change, there are a few questions we should be asking ourselves. First, what benefit do we get from the EPA and environmental regulations? Second, why is the Trump Administration pushing to dismantle federal environmental protections? And third, what kind of impacts can we anticipate if Trump succeeds in significantly rolling back environmental protections? This post is part one of a three-part series that aims to consider these issues in further detail.

Part I: The Benefits of Federal Environmental Protections


To fully evaluate the benefits of the EPA, one must consider what our country was like without it. To glimpse what the U.S. environment looked like before the EPA protections, check out "Project Documerica," a photo project commissioned by EPA at its founding to document the state of the environment at the time and the agency’s efforts to improve environmental conditions. This was an era where rivers in industrial areas caught on fire, and where both republicans and democrats agreed that environmental regulation was necessary.

Since its formation in 1970, the EPA has implemented a series of successful regulations, including those prohibiting use of the pesticide DDT, significantly reducing air emissions that cause acid rain, removing lead from gasoline and paint, and regulating asbestos as a pollutant. Despite false and misleading claims by opponents, data indicates that the benefits of environmental regulations far outweigh the costs and supports job creation. EPA regulations have eliminated dangerous toxins from out daily live while simultaneously promoting economic growth and adding social value.

Environmental Regulations Help Create Jobs


A 1994 Economic Policy Institute study reported that “environmental spending has actually boosted aggregate employment.” Moreover, a 2008 study published in the Journal of Environmental Management found that employment in environmental protection industries increased from 700,000 jobs in 1970 to 5 million jobs in 2003. This study concluded that environmental regulations have a positive net effect on employment. While environmental regulations create jobs on an economy-wide scale, localized job losses may occur. However, we can reduce potential negative employment impacts through implementation of policy solutions, such as retraining workers for jobs in cleaner industries. The overall impact of environmental regulations on employment is positive. Similarly, these regulations have positive effects on economy at large and lasting create social benefits.

Environmental Regulations Promote the Economy and Add Social Value


From 2001–2010, the Office of Management and Budget (OMB) conducted a cost-benefit analysis for 106 major regulations. OMB determined that the combined value of these regulations far exceeded their combined costs; in fact, the value of the estimated benefits was seven times the costs associated with these regulations. The OMB study noted that clean air regulations have one of the highest benefit-to-cost ratios. For example, for every dollar of cost associated with the 1990 Clean Air Act Amendments, $25 dollars of benefits accrued. With billions of dollars in economic benefits added to the economy annually, the cost effectiveness of environmental regulations makes them vital for both the environment and the economy.

Another way in which environmental regulations promote the economy is by keeping workers healthy. As a result of the 1990 Clean Air Act Amendments, the U.S. added 13 million days of work and productivity to the economy in 2010. Even more important than the economic impact of the amendments is the social value added. In 2010, the 1990 Clean Air Act Amendments saved an estimated 160,000 lives. By the end of 2011, the estimated number of total lives saved by the amendments will reach approximately 2 million people. Additional societal benefits include 86,000 fewer emergency room visits and 1.7 million fewer asthma attacks. With results like these, it is hard to ignore the benefits of environmental regulations.

So, what benefits do we get from the EPA and environmental regulation? Well, we increase employment, receive benefits that far exceed the costs expended to achieve them, we increase worker productivity, we protect public health, and last but not least we save lives. With pronounced benefits such as these, why would the Trump administration push for rollbacks of environmental regulations? Part two of this series will explore Trump’s motivation for eliminating environmental protections.

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