Do environmental regulations really “kill jobs”? The data says no.
It is a decades-old argument that’s made frequent headlines these past few months: first when the Trump administration announced Scott Pruitt as their nominee for EPA Administrator, and again this past week as Congressional Republicans took aim at a series of Obama-era environmental regulations using the draconian Congressional Review Act. “In my home state of Kentucky and others across the nation, the Stream Buffer Rule will cause major damage to communities and threaten coal jobs,” declared Senate Majority Leader Mitch McConnell, ahead of the vote that repealed a Department of Interior regulation on stream and groundwater pollution from surface mining operations. “Fortunately, we now have the opportunity to work with a new president to begin bringing relief from those burdensome regulations.”
On Friday morning, after the House voted to repeal another Interior rule, this one limiting methane emissions from oil and gas drilling sites on public land, Chairman of the House Natural Resources Committee Rep. Rob Bishop (R-UT) similarly claimed the repeal would be “a vote for people, and making sure that their lives are better, not worse.”
That’s a bold claim from Bishop, considering that data as recently as June 2016 indicated strong nationwide support for the new limits on methane emissions, posting an impressive two-to-one margin. More methane in the atmosphere is also demonstrably bad for human health.
But job losses and rising energy costs don’t poll well, either. Still, it seems to be the case that conservative lawmakers are eager to repeal or block regulations that enjoy broad public support — with their main argument being that regulations kill jobs and are irredeemably burdensome. But is job loss really the problem?
In short: no.
There’s no evidence to indicate that government regulations result in any long-term net job losses for the U.S. economy, as Richard Morgenstern demonstrated with his widely cited analysis in 2015. The big picture is more complicated, of course. The impacts of environmental regulations on labor markets are manifold, with regulations that may lead to job losses in one sector often creating jobs in competing industries or even regulatory jobs in that same sector, so it’s difficult to generalize about the impact of regulations on the U.S. economy as whole. Government regulation — of all stripes — does, inevitably, tend to have an adverse short-term effect on employment in targeted industries; yet all available research suggests that the impact is marginal and rarely a straight negative for the overall economy. “The key point is that regulation affects the distribution of jobs among industries, but not the total number,” noted Roger Noll of the Stanford Institute for Economic Policy Research in an interview with Mother Jones in 2011.
The costs of regulation are also, typically, one-time costs — whereas the benefits of environmental regulations pay dividends over extended periods of time. Industry adjusts to the new baseline. The long-term burden primarily falls on those who are laid off; Morgenstern found that those who suffer most, unsurprisingly, are employees who find themselves out of work in regions of the country where there isn’t much additional work to be found. Nonetheless, W. Reed Walker, in his research into the costs of the Clean Air Act in the early ’90s, discovered that “relative to the estimated benefits…these one-time transitional costs are small.”
This doesn’t mean that we should simply write off those who are hardest hit by environmental regulations as inevitable costs. But this data begs the question: is the vulnerability of workers in industries like mining the fault of regulatory agencies charged with protecting air and water quality for the whole country? Or should we be more closely scrutinizing the forces that have left certain regions dependent on notoriously unreliable extractive industries, industries in which some players apparently can’t operate productively without threatening public health?
Rep. John Yarmuth (D-KY) made a similar argument ahead of the House’s vote to repeal the Stream Protection Rule last Wednesday, bringing a bottle of polluted well water from Pike County, Kentucky with him onto the floor. “This bottle of — I guess you can call it a liquid — wasn’t taken from an industrial waste site or from the runoff of a landfill. This came from the drinking well of the Urias family’s home.” Yarmuth added that if any of his Republican colleagues were willing to drink the water in the bottle, he’d join them in voting to repeal the Stream Protection Rule. No one took him up on the offer, but the rest of Kentucky’s House delegation joined every other House Republican in voting for the repeal. The Senate followed suit the next day.
Instead of spending their time attempting to deregulate industries that are poisoning their constituents’ air and water supplies at alarming rates, why aren’t representatives like McConnell or Bishop proposing incentives to diversify rural economies while supporting common sense measures to protect their voters’ drinking water? Like many, McConnell’s go-to response is that they’re “protecting jobs” — but while shielding extractive industries from modern technological and public health standards may be the easiest way for politicians to exert control over the inevitable exodus of jobs in certain districts, this is at best a diversion. No matter what Sen. McConnell and his ilk claim, eliminating all environmental regulations impacting McConnell’s home state of Kentucky, for example, won’t change the fact that other coal-producing regions and alternative energy markets are becoming increasingly competitive, or the fact that the most accessible, lowest-cost coal reserves in Appalachia have already been exhausted.
Eliminating environmental regulations will, however, leave the coal workers McConnell claims to champion with toxic groundwater and air clogged with carcinogenic particulates — these same communities already face disturbingly high rates of asthma, heart disease, multiple organ disease, cancer, and other illnesses, not to mention few prospects for long-term economic growth. Why insist on paying so much attention to propping up polluting industries in the short-term, rather than helping communities adapt and build resiliency for the long run? Doesn’t Appalachia, and every other region and community now subject to the boom-and-bust cycles of extractive industries, deserve a future after coal, or natural gas, or oil?
Anyone who tries to argue that communities can live with the environmental consequences of unregulated industry should be laughed out of the room. The E.P.A. wasn’t created out of the blue; its existence is the direct result of public outcry after decades of unchecked industrial waste and pollution left rivers ablaze, the Northeast withering from acid rain, the majority of U.S. waterways and coastal waters unsafe for swimming or fishing, and major cities across the country choked with smog. The proven health impacts of regulated mining, drilling, and fuel-processing plants should be enough to remind us that we simply cannot live with toxic air and polluted water. So when the industries have had their way, someone has to clean up the mess, unless we’re prepared to abandon large swaths of the country. We can either charge the responsible industries up front and reduce the costs to both the economy and to society as whole in the long run, or pass both the bill and the compounded consequences of years of unchecked environmental degradation to the taxpayers a decade or two down the road.
The second often-ignored issue in this debate is the economic value added by environmental regulations. In a report for the Earth Institute at Columbia University, Dong Guo, Satyajit Bose, and Kristina Alnes write:
…poor air quality is known to lead to higher rates of sickness, and sick days, in a population…In addition, the pollution control sector often generates higher quality service jobs that can be more numerous than the jobs eliminated in extractive and manufacturing sectors.
In fact, past trends in the U.S. indicate that states with stronger environmental policies “consistently out performed the weaker environmental states on all economic measures,” writes MIT’s Dr. Stephen Beyer. While there’s no definitive causal link between the two, Beyer also notes that “highly skilled and well educated workers tend to be attracted to regions that offer a better quality of life. Thus, new industries, high-technology firms, and R&D laboratories may well migrate to environmentally strong states.”
One doesn’t have to look far to see Beyer’s prediction borne out; places like Jackson, Wyoming are among the many examples of environmentally committed towns and cities in the middle of the country attracting highly skilled workers from the coasts. California, of course, is a classic example — despite having some of the strictest state-level environmental regulations in the country, California boasts the sixth-largest economy in the world, trailing only the U.K., Japan, Germany, China, and the U.S. as whole. The Golden State has also posted higher rates of job growth than the rest of the U.S. for the past seven consecutive years, while undertaking the most ambitious climate change-oriented regulatory agenda in the country. A far cry from killing jobs, economists attribute this doubling-down on environmental standards in the wake of the 2008 recession a key reason why California didn’t just recover, but bounced back and is flourishing.
What’s driving California’s environmental ambitions? Yes, it is a blue state and progressive stronghold, but more importantly the state is home to five of the country’s most polluted cities. The state’s past has also taught it that environmental regulations do work; one needs only to look at Los Angeles before and after the Clean Air Act went into effect. Transportation is the main driver of California’s pollution today, which was likely a deciding factor in the state’s choice to forge ahead with its Low Carbon Fuel Standard and cap-and-trade regulations even in light of the 2008 recession. This path is already paying dividends: the “cumulative benefits from avoided health costs, improved energy security, and reduced social costs of carbon” are projected to reach $10.4 billion by 2020 — $23.1 billion by 2025.
Opponents of environmental regulations also tend to greatly overstate the potential impacts of proposed rules, and industry players often blame regulations for hardships even when other economic factors are likely at play. Guo, Bose, and Alnes note that, historically, the dire fears about environmental regulations’ job-killing capacity haven’t been realized. Again, they look to the Clean Air Act which, despite the unprecedented regulatory standards it introduced and the panic it instilled in the mining industry, had “no significant impact on coal mining jobs nationwide.” While the coal industry did record job losses in the following decade, the authors add, “the vast majority of these losses are due to increased productivity.” The electric utility industry asserted that implementing the CAA would “cost $7.5 billion and tens of thousands of jobs;” yet the actual cost of the program “has been closer to $1 billion,” and the law has been a net creator of jobs, as reported by The New York Times and the E.P.A.
So what about the costs of not implementing environmental regulations? As the Fiscal Times reported just last week, “some analyses show that economic costs of health problems in Appalachian coal mining areas are more than five times greater than the economic benefits from mining.” Air pollution is estimated to be a primary cause of 3.1 million deaths annually; “particulate matter,” such as power plant emissions or coal dust from mining operations, “is estimated to cause about 8% of deaths from lung cancer, 5% of deaths from cardiopulmonary disease and about 3% of deaths from respiratory infections.” Looking back to California, the state’s ambitious Low Carbon Fuel Standard and cap-and-trade regulations are projected to prevent 600 heart attacks, 880 premature deaths, 38,000 asthma attacks, and nearly 75,000 lost work days just by 2025. The burden unregulated industry places not only on our healthcare system but directly on the economy in terms of lost productivity due to poor health is immense. Recent studies suggest that the economic losses to the U.S. economy that result from fossil fuel-generated power alone costs Americans anywhere from $350–880 billion annually. Not to mention, the new methane emissions standards that Congress just repealed last week could have helped save up to 41 billion cubic feet of gas annually from being vented into the atmosphere, enough fuel to power nearly three quarters of a million homes for a full year.
In the end, the real problem seems to be that the wrong questions are being asked. By raging about environmental regulations being “job-killers,” representatives like McConnell and Bishop from districts dependent on extractive industries today are able to side-step the looming questions of what will inevitably happen when the mines are exhausted or the wells run dry, and their voters are left with nothing to show for it but toxic water and smog-choked air.
Their constituents deserve better, and so does the country.