Last Thursday, President Barack Obama unveiled a $447 billion plan to stimulate job growth through a combination of tax cuts and public spending. Obama deserves credit for finally turning his focus from the debt-reduction circus to the graver unemployment crisis. Yet the president’s speech rang hollow: A week earlier, Obama missed a prime opportunity to create jobs and stimulate the economy when he ignored the Environmental Protection Agency (EPA) and failed to toughen smog regulations.
The EPA’s proposal would have forced cities to reduce ground-level ozone, or smog, from 84 parts per billion (ppb) to between 60 and 70 ppb. Reducing smog is vital to promoting public health. Smog contributes to heart attacks, bronchitis, and asthma and is responsible for thousands of premature deaths annually. According to EPA head Lisa Jackson, the current Bush-era regulations are “legally indefensible,” since they “set the standard outside the range that a board of expert scientists said was necessary to protect human health.” An EPA report claimed that toughening smog rules would save 12,000 lives, prevent 120,000 asthma attacks, and avert up to $100 billion in health care costs.
But public health isn’t a priority of the Obama administration — at least, not compared to kowtowing to business. Implementing the smog regulations would have cost the industry somewhere between $19 and $90 billion, and, according to business leaders, killed 7.6 million jobs by 2020. Given our current economic predicament and the anti-oversight, pro-business bent of the Republicans, any environmental regulations are dead on arrival. It is no surprise, then, that Obama caved.
Here's the irony, though: The same smog regulations that industry found so onerous would actually have created jobs and helped the economy.
First, let’s dispose of the canard that regulations slaughter business. Every time the EPA proposes new pollution standards, companies scream about the certain, dire economic impacts. The current ozone standards, for example, were introduced in 1997, and were also greeted with much gnashing of industrial teeth. Yet a recent study by the Center for American Progress found that increased compliance to the 1997 regulations had zero effect on job growth. And economist Laurie Johnson discovered in one study that during the 1990’s, “The rate of job losses slowed for industries directly affected by the [Clean Air Act] Amendments, while it increased for other manufacturers.”
So, despite the industry’s protests, regulations don’t kill jobs. But how do they create them? Because of the economy’s current instability, companies have been reluctant to spend money, which has deepened the unemployment doldrums. Complying with environmental regulations, however, forces businesses to use their accrued cash, thereby spurring job growth. As Paul Krugman put it: "And now you can see why tighter ozone regulation would actually have created jobs: it would have forced firms to spend on upgrading or replacing equipment, helping to boost demand. Yes, it would have cost money — but that’s the point! And with corporations sitting on lots of idle cash, the money spent would not, to any significant extent, come at the expense of other investment."
Sure enough, the historical record supports Krugman’s claim. A retrospective study found that environmental regulations generated $36 trillion between 1970 and 1990. And this logic applies in 2011, too. A recent study by the Umass demonstrated that the new EPA rules would have added 1.5 million jobs by 2015 in power plants alone — and, unlike the low-wage jobs that dirty energy typically supports, these would have been well-paying, highly skilled positions.
When we talk about “green jobs,” we usually refer to the alternative energy sector — jobs birthed by building solar arrays and wind turbines. But pollution control creates jobs too, and potentially lots of them. Obama claims to care about boosting employment and enforcing the EPA’s proposed smog standards represented a historic opportunity to do just that. Instead he succumbed to pressure and false rhetoric from big business, and America is less employed — not to mention sicker — for it.
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