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Is the EPA really a 'jobs killer'?

For Republicans, the EPA ranks up there with the IRS as one of the most-reviled agencies in Washington, calling it a 'jobs killer.' The record of the Obama EPA, though, is more nuanced.

By Staff writer / November 22, 2011

Coal is piled beside the W.A. Parish Electric Generating Station in Thompsons, Texas. The EPA’s intent to limit mercury emissions by coal-fired plants will affect Texas significantly because of its many coal-fired power plants.

AP/File

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Newt Gingrich and Michele Bach­mann want to abolish it. Rick Perry vows that he would declare a moratorium on all its activities the moment he becomes president. Herman Cain wants it replaced by an independent commission.

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The Environmental Protection Agency (EPA), clearly, is not on many Republicans' Christmas card list. In their debates and in speeches, the GOP presidential candidates have crystallized conservatives' charge against the agency: Its regulations kill jobs.

Under a Democratic president – and at a time of economic turbulence – the EPA faces harsh criticism from the political right for being heavy-handed. But unraveling its actual impact on the economy suggests that its influence is more nuanced, according to several economic analyses.

To be sure, President Obama's EPA has undertaken several key environmental initiatives, such as ozone and greenhouse-gas regulation. But attempts to paint these new rules as economic game changers often overstate their importance, say several independent economists.

"There's certainly a lot of use of this phrase that 'new environmental regulations are job killers' or the flip side: We can 'grow the economy by focusing on green jobs,' " says Wayne Gray, an economist at Clark University in Worcester, Mass. "But either perspective misses the scale of the cost of environmental regulations, which just are not a very large scale of costs for most in the economy."

Among the moves by the Obama EPA that businesses say are most damaging:

•It proposed in January 2010 to tighten standards for smog-forming ozone, though Mr. Obama backed off on Sept. 3, bowing to the "importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover." The proposal could be reimplemented in 2013 if Obama is reelected.

•It is expected to unveil next month a "toxics rule" under the Clean Air Act that would require power plant operators to filter out mercury and other pollutants.

•Its studies found that greenhouse gases were a danger to public health, meaning that it must regulate them, according to a US Supreme Court ruling.

•It revised a rule put in place by the George W. Bush EPA but overturned by the courts that reduces permissible smokestack emissions of sulfur dioxide and nitrogen oxide in Eastern states. The rules are scheduled to go into effect Jan. 1, 2012.

Scores of power plants and as many as 1.6 million jobs would be lost between 2012 and 2020 if the EPA proceeds with air- and water-quality regulations, according to a recent study by the American Coalition for Clean Coal Electricity.

"In the area of energy, EPA has been very, very aggressive, much of this based on their global-warming campaign, and the effect is troubling on the energy sector," says Diane Katz, a research fellow with the conservative Heritage Foundation. "If coal plants are closing down because they can't meet standards EPA is setting, well, those are jobs lost."

That could be true, some economists say. But others say that industry-paid studies (as is the one cited above) often include questionable assumptions and economic models not validated by broad peer review. They also note that jobs could also be created, not just destroyed, by regulation. The EPA's rules are required to undergo a transparent cost-benefit analysis that is peer reviewed by others. But business groups, like the US Chamber of Commerce, say the EPA analysis is flawed.

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