Environmental Rules: Job Killers or Job Creators?

Editor’s Note:  Any Analysis which considers the potential for regulations to create jobs need to distinguish between productive and unproductive work.  An economy cannot be sustained by diverting scarce resources to “paper-pushing” and other unproductive, federally-mandated labor.

From: NYT


It is a rare day that you pick up a newspaper without encountering a reference to “job-killing regulations” from a pro-business Republican complaining about the burden of a new rule from the Environmental Protection Agency or other government office. Sometimes large and scary job loss numbers are attached to the assertion and attributed to a study, most often financed by the affected industry.

For example, when the E.P.A. issued a final rule in December limiting emissions of mercuryand other airborne toxins from power plant emissions, opponents from the coal and utility industries said the regulation would cost 1.4 million jobs. Supporters of the rule, conversely, said the rule would create 1.4 million jobs in environmental restoration, retrofitting of plants and conversion to renewable electricity sources.

The E.P.A. and the White House Office of Information and Regulatory Affairs, which reviews all proposed federal regulations, have never used job figures as part of the calculus of the costs and benefits of rule-making, largely because there is no accepted methodology for assessing them.

But on Tuesday, the Institute for Policy Integrity at New York University’s School of Law said in a new report that despite the limitations of current methods of measuring job gains and losses, they should be considered when drawing up future environmental rules.

Michael A. Livermore, the institute’s director and the principal author of the study, noted that the the oratory surrounding job impacts has heated up in recent years — for example, in the debates over new Clean Air Act rules and the Keystone XL oil pipeline. (His report noted that the term “job-killing regulations” had appeared in a sampling of American newspapers four times in 2007 and 706 times in 2011.)

The polarization of the discussion has led to inflated claims on both sides, he said.

“It may seem optimistic to imagine that politicians are going to drop the rhetoric about jobs,” Mr. Livermore said in a conference call, “but our hope is to improve the broader discourse about environmental rule-making.” He noted that rules to limit exposure to harmful emissions are imposed to save lives and improve health, not to create jobs.

The United States should decide whether the Keystone XL pipeline is in the national interest primarily because of energy security and the broad economic impact, he said, not because it would create a few thousand temporary construction jobs.

But he said that the E.P.A. and other agencies should at least try to estimate job impacts, using the best available tools to estimate job losses and gains from proposed regulations while acknowledging the tools’ limitations.

“The E.P.A. says that’s very hard and not exact,” Mr. Livermore said, “but they’re in charge of many things that are hard, and they should do their best and put uncertainty parameters around it.”

“It may be much harder for the agency to assess economy-wide impact of big rules like the mercury standard, but the E.P.A. does lots of smaller rules, and in those cases it can be a lot easier to suss out the impact on hirings or layoffs.”

Leave a Reply

Name not required for anonymous comments. Email is optional and will not be published.

Please Answer: *