Is the EPA really a 'jobs killer'?

An economic analysis of the "toxics rule" by the Economic Policy Institute, a Washington think tank that studies policy effects on low- and middle-income workers, suggests that it "would have a modest positive net impact on overall employment, likely leading to the creation of 28,000 to 158,000 jobs between now and 2015."

A February report by University of Massachusetts economists came to similar conclusions. Investments driven by the EPA's new air-quality rules on ozone and toxics "will create nearly 1.5 million jobs, or nearly 300,000 jobs a year on average, over the next five years."

Some business executives acknowledge that regulations can spur hiring. "We have to hire plumbers, electricians, painters, folks who do that kind of work when you retrofit a plant. Jobs are created in the process – no question about that," Mike Morris, chief executive officer of American Electric Power, recently told The Washington Post.

But most business leaders reject the notion that EPA regulations have benefits. John Engler, president of the Business Roundtable, said that "establishing these new ozone standards would be tantamount to putting 'not open for business' signs in counties across the country at precisely the wrong moment, when unemployment is high and on the rise."

Republicans in the GOP-controlled House of Representatives agree, seeking to undo the actions of the Obama EPA. Since 2010, the House has weighed 17 measures to reduce or restrict environmental controls, approving 10, according to the League of Conservation Voters.

Most will have no effect because the Senate won't pass them. But the trend shows Republican fervor. In the Senate on Nov. 10, a resolution to roll back the EPA's smokestack emissions regulations failed, 41 to 56. Its sponsor was Sen. Rand Paul (R) of Kentucky, whose state produces a lot of coal. The EPA, he argued, was issuing "radical, extremist regulations" that kill jobs.

Many economists reject such language as overstatement. Though environmental regulation has become more stringent, US manufacturers have faced only a moderate increase in their spending on pollution controls, says Dr. Gray of Clark University. Those costs, for instance, have risen from roughly 0.3 percent of total manufacturing shipments in 1973 to 0.4 percent in 2005.

Some highly polluting and highly regulated industries do face higher pollution-control costs. But even oil refining spent only about 1 percent of its shipments to comply with environmental regulations in 2005, Gray explains.

The numbers aren't big enough to cause serious economic hardship. "The idea that environmental regulations would wipe out an industry or have a serious impact is implausible," Gray says. "Early estimates of cleanup costs are often substantially overstated."

[Editor's note: The original version of the above quote has been corrected.]

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