“Job-Killing” Environmental Regulations: Faith or Fact?

West Virginian Allen Johnson just wrote a fabulous – if disturbing – piece on the toxic chemical spill that contaminated drinking water for 300,000 people living in his state. The now-toxic Elk River, West Virginia’s previously last remaining unpolluted waterway, flows through the heart of Charleston, and eventually empties into the Ohio, where millions more await the chemical onslaught downstream. Johnson, on behalf of Christians for the Mountains, details the almost total lack of regulation of coal-related toxic chemicals in the Mountain State, and the GOP’s current “anti-poverty bill” that would further weaken enforcement of the Clean Water Act.

Allen Johnson, Christians for the Mountains

Allen Johnson, Christians for the Mountains

With so many Americans suffering the loss of clean drinking water, and the prospect of yet another toxic river, we’ve heard many voices calling for stricter regulation of toxic chemicals in storage near waterways. But House Speaker John Boehner doesn’t think this is such a good idea.

“We have enough regulations on the books,” said Boehner last week. “Why wasn’t this plant inspected since 1991? I am entirely confident that there are ample regulations already on the books to protect the health and safety of the American people. What we try to do is look at those regulations that we think are cumbersome, are over the top, and that are costing the economy jobs. That’s where our focus continues to be.”

So there you have it in a nutshell. Enough regulation already! In fact, we’re rolling back “cumbersome” regulations that are costing jobs. Those job-killing regulations.

Okay, we’ve heard this theme before. But have we really given much thought to the assumptions the Speaker is making? The first is clear: existing regulations are good enough to protect our water and our citizens. And the second: Cumbersome regulations kill American jobs. But do these hold water? Let’s take a closer look.

Are Existing Regulations Really Good Enough?

You’d think that a facility storing huge vats of toxic chemicals just upstream of a public utility’s water intake would be subject to all kinds of inspections and oversight, wouldn’t you? But the Elk River facility hadn’t been inspected by either state or federal authorities since 1991, when it was used by a former owner for other purposes. So, who was sleeping on the job? Well, it appears that no one was. Existing law, and handcuffs on regulators, created the perfect storm that was unleashed on West Virginians:

  • Current laws in West Virginia require inspections for chemical production facilities, but not for facilities used for chemical storage, like the one that leaked these toxins.
  • Congress has gone to great lengths to hamstring the EPA, and in the recent budget compromise, the GOP touted the fact that they cut the EPA’s funding by 20 percent since 2010.
  • Lacking adequate funding, EPA announced plans last month to reduce inspections by one-third over the next five years.
  • Another potential regulator, OSHA, now has so few inspectors that the average workplace will only be inspected once every 99 years.
  • No laws required the toxic spill site to notify the WV utility of its presence just a short walk upstream from the water intake.
  • And, shockingly, the coal-related chemical that fouled the Elk River – unpronounceably called methylcyclohexane methanol (or MCHM) – is not required to be tested for toxic effect under existing law. Even though it is obviously harmful, it is one of 62,000 chemicals that are legally presumed to be safe in the U.S. without testing.

So maybe it’s fair game to ask your congressional representative if existing laws really do enough to protect you and your children. But what about the concern for jobs?

Do Environmental Regulations Really Kill Jobs?

In much of our political discourse, you never hear the word “regulation” without the preceding adjective “job-killing.” But it wasn’t always that way. In 2007, for example, a Nexis search on the phrase “job-killing regulation” turned up only a handful of entries. By 2011, however, the term appeared hundreds of times. Clearly, this idea is riding really high just now. But is the premise valid?

Freedom Industries chemical site on the banks of Charleston's Elk River

Freedom Industries chemical site on the banks of Charleston’s Elk River

Both ends of the political spectrum are prone to wild claims about job impacts of all sorts of policies. When the EPA issued rules under the Clean Air Act last year limiting mercury emissions from coal-fired power plants, the coal industry claimed that it would cost us 1.44 million jobs. But researchers at UMass countered that the rules would instead create 1.46 million jobs. The EPA itself took a different tack, claiming that the rules would benefit us by as much as $407 billion related to improved health and ecosystems – and that’s worth a lot of jobs!

Similarly, when the Canadian tar-sands Keystone XL Pipeline project was proposed through the American Midwest several years ago, oil-industry backers claimed that it would generate as many as 553,000 jobs. But the U.S. State Department put the total at no more than a puny 6,000 temporary jobs.

With such disparate claims, it’s hard to know what to think. But one thing is abundantly clear: There’s no shortage of think-tanks willing to generate reams of paper in support of whatever jobs claims may suit any particular agenda.

What is in short supply, however, are researchers willing to tackle the economic costs of environmental degradation and pollution. Think about West Virginia again: What happened to the restaurants, hotels, bakeries, coffee shops and thousands of other businesses shut down cold by the contamination of their water supply? What happened to their employees? What happened to those jobs? Why didn’t we hear about “job-killing non-regulation?”

Well, even if you don’t hear it here in the U.S., in China they talk about it all the time. Everyone knows about China’s severe air and water pollution. And the Chinese give a lot of thought to the drag on their economy from their lack of environmental protection. The estimates vary. In 2004, the Chinese government announced that environmental pollution cost the country $64 billion in economic losses, or 3 percent of China’s GDP. The World Bank and international economists disagreed; they figured that environmental degradation cost the Chinese economy about three times as much, or 8-12 percent of GDP annually. Whoever’s right, the numbers are staggering, ranging from a low of maybe $60 billion to a high of more than $200 billion. Per year. And that was a decade ago.

Of course, if pollution drags down the Chinese economy, there’s no doubt of its potential to drag down ours too. Maybe not by 8-12 percent of our GDP, but there is a cost. And while the relationship between GDP growth and job creation is a matter of serious debate, no one denies that lower growth means fewer jobs. For example, in the 2007 recession, U.S. GDP declined by 1.3 percent, and we lost almost 8 million jobs. In 2011, Moody’s Analytics figured that Congressional austerity measures would cut GDP by 0.5 percent, and that would cost us 400,000 jobs. I’m sure the relationship between growth and jobs defies simple rules of thumb by laymen like us. But if environmental degradation drags down the economy, then it certainly kills jobs in some amount – maybe millions of jobs.

So the next time you hear someone complaining about job-killing regulations, maybe you’ll ask whether they’ve thought about “job-killing pollution” or “job-killing non-regulation.”

Anyone heard those phrases recently? Maybe it’s time, don’t you think?

J. Elwood

3 thoughts on ““Job-Killing” Environmental Regulations: Faith or Fact?

  1. Cricket Hunter

    Shareholder confidence is an important part of our economy and measure of our economic health — reports on which then affect jobs and spending as well. As a shareholder (albeit a minor one), I want the peace of mind to know that companies I invest in will do the right thing for society as well as the company’s bottom line. It’s awfully hard to do both unless *all* companies are subject to the same good-neighbor sorts of rules. I can and do choose to invest in socially responsible funds, but those should reflect icing-on-the-cake pro-social value, not whether my neighbors will have affordable, drinkable water or not. The costs of pollution prevention and accident prevention should be part of the cost of doing business. There is a cost there whether we calculate and invest up front or pay and suffer later.

    1. John Elwood Post author

      Cricket, more on external costs:
      The National Academy of Sciences reveals that the coal industry is fundamentally uneconomic, surviving only on a massive subsidy paid by the entire rest of the world. In 2010, the Academy produced a report called The Hidden Costs of Energy, which took a close look at the “external costs” of coal – the costs in public health and climate disruptions associated with coal pollution that are paid by everyone…. For coal, the numbers are staggering. Coal producers receive about 4.5 cents when they sell the amount of coal necessary to generate one kilowatt-hour of electricity. But the Academy has determined that the external costs of that same amount of coal totals somewhere in the range of 4.2 cents to as much as 13.2 cents – triple the entire value that any coal company receives for delivering the stuff in the first place. In a single year (2005) they burned enough so that the 13-cent subsidy totaled more than $200 billion….
      Read more at: http://belovedplanet.com/2013/11/20/psst-wanna-join-the-war-on-coal/

  2. Pingback: “Job-Killing” Environmental Regulation? (Part 2) | BelovedPlanet

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