Effects of Environmental Regulations on the Economy

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According to an article at aaas.org by Noelle Swan, a nationally award winning journalist who covers science, technology, and the environment, studies that have been released regarding the economic impact of environmental regulations have been somewhat conflicting. In her article she cites William Pizer, a professor at Duke University. “Pizer cited a study that blamed U.S. environmental regulation for a roughly 10 percent increase in imported goods from Mexico and Canada in the ’90s and 2000s.” However, Pizer also takes issue with the common belief that the EPA is what is responsible for American job loss. In fact, most job loss occurred in the 2000’s, 30 years after the EPA had already been in place. In my opinion he is correct, as it is foolish to blame one agency that has already been there for much longer than the problem has been.

Elsewhere in the article Swan cites Pizer who draws a line between the effects on the local scale and national scale. At the local level, the effects have been more drastic. According to the article “during the first 15 years following the implementation of the Clean Air Act, an estimated half-million jobs shifted from counties with plants that were out of compliance with air quality standards, into neighboring counties where plants met the standards and were not subject to additional costs or penalties.” This may seem very problematic at first glance but when you think about it, these jobs are not being lost overseas but merely transferred to another area in the U.S. While this may affect individuals negatively, it doesn’t have a national effect.

After all this, however, Pizer’s final thoughts are interesting. He believes that even with all the studies done that on the macroeconomic level the effects have been small. He cites the statistic that between 1977 and 1986 8 million jobs have been lost following the clean air act. But even after mentioning this his closing thought is “The takeaway for me is that there is an economic cost to environmental regulation, even though some people in the past have tried to paint it as a free lunch. However, generally those costs have been small and they have been associated with significant human benefits.” Overall I agree with him in this sense. There may be economic effects due to enforcing environmental regulations but they are all relatively small compared to the massive benefits that humans get as a whole from having a cleaner and safer environment.