While many of us are willing to admit that some environmental regulations are justified, we are also concerned about what the growth of such regulations is doing to the employment picture.
Scott Shane, a professor of entrepreneurial studies at Case Western University, has a provocative piece (“When the Color of Unemployment Is Green”) on The American on the toll that green regulations take on job creation. The evidence is staggering.
Shane quotes an MIT economist, for example, who found that changes to clean air regulations cost 500,000 jobs over a 15 year period. Another study found that multinationals have increased the overseas portion of their business by 5 percent because of U.S. regulations.
Of course, the United States isn’t the only country where environmental regulations cause job loss. In Spain, according to one study, green regulations destroy 2.2 jobs for every job they create.
The Obama administration realizes that the country is creating jobs too slowly, and I’m sure that deep down many insiders know that environmental regulations are a big part of the problem. But the administration believes that ultimately these regulations will create new green jobs. Eventually.
Unemployment, by contrast, is right here, right now. Shane, who acknowledges that some environmental regulations are a good idea, has a commonsense solution to the problem:
Focusing on overall costs and benefits might be the right way for academics to evaluate environmental regulation, but that approach is wrong for policy makers right now given the need for our elected officials to focus on Americans’ key objective: immediate job creation. The EPA has already put many safeguards in place since it was founded in 1970. Right now isn’t the time for adding more regulations and risking the loss of jobs or undermining the potential for job creation….
Much like the Federal Reserve does not worry much about fighting inflation when unemployment is the problem, when jobs are scarce, creating them should be our highest priority. Until we get our unemployment problem under control, we should impose a moratorium on any new environmental regulations. Now is the time to stimulate job creation. We can worry about adding environmental regulations in the future, when unemployment is less of an issue.
Wouldn't it be great if we could pull back on regulations until more people are working?
This makes such sense in hard times. Why not get the economy up and running and then worry about snail darters and their kin when all our kin are employed?
There are two reasons why Shane’s sane idea is very unlikely to be tried. One is that environmentalism is an ideology and ideologues are rarely willing to compromise. The second is that environmental activists tend to think of the world in static terms (in nature species thrive and perish, but environmentalists get apoplectic at the thought that some insignificant variety of rat is on the brink of extinction).
They would not be able to foresee that, even if a moratorium created a few extra puffs of factory smoke,human ingenuity would find a way to clean up any environmental problems created by a moratorium.