Oct 24, 2011

Environmental Regulation Bad at Killing Jobs

Thanks to NAFTA, recent history is showing that environmental regulations are doing very little to reduce American jobs. This article, from Kristen Sheeran, building off of Paul Krugman's recent attack on Republicans, hits some important highlights:

  1. "Businesses are unlikely to relocate to avoid compliance with environmental regulations.
    The empirical evidence shows that there has been little movement by U.S. firms to other countries to escape environmental regulatory burdens. Nor has there been a migration of new investment in dirty industries to developing countries with lax regulations, the so-called "pollution havens". 
  2. "Plant closings and layoffs as a result of environmental regulations are actually rare.
    Layoffs that can be attributed to environmental regulations account for only one-tenth of 1 percent of all mass layoffs... This is equivalent to roughly 1,000 to 3,000 jobs per year across the entire country. For example, less than 7,000 jobs were lost between 1990 and 1997 as a direct result of the Clean Air Act Amendments.
  3. "At the economy-wide level, there seems to be no real trade-off between environmental regulation and growth.
    Environmental regulation leads to a very slow shift in the composition of spending: Jobs are gained as workers produce, install, and maintain cleanup equipment and engage in retrofits, and are lost as firms pass on those cost increases to consumers, who have to cut back their purchase of goods and services from that sector. Environmental regulation begins a slow shift away from the products of dirty industry.
"As with all public policy, changes in environmental regulations create winners and losers... Labor market conditions in the U.S. will continue to be more heavily influenced by larger structural changes in the U.S. and global economy than any proposed regulatory changes. If we want to get to the heart of the unemployment problem in the U.S., we need to explore these structural issues."

On a related note, this just published today -- the Obama Admin's investment in clean tech are outperforming the private market.

Also, Nature magazine warns of devastating climate changes in our lifetimes.

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