How economics may reshape green policy

Regulation of the environment benefits the economy, says a White House report.

Even though "economy" and "ecology" come from the same Greek root - "oikos," or "house" - reconciling the marketplace and nature has never been easy.

One measures things in dollars and cents. The other sees the world more intangibly, sometimes ineffably.

For this reason, it's always been an uphill fight for environmentalists arguing to protect the landscape, save an obscure species from extinction, or clean up the air and water. Opponents are quick to rebut with bottom-line statistics about jobs lost and productivity harmed.

It came as a surprise, therefore, when the White House Office of Management and Budget (OMB) recently declared that environmental regulations are good for the economy.

Looking at a variety of areas - education, energy, housing, health, labor, but mostly the environment - the Bush administration's budget office reported to Congress that "the estimated total annual quantified benefits of these rules range from $146 billion to $230 billion, while the estimated total annual quantified costs range from $36 billion to $42 billion."

Of these totals, according to OMB, the yearly benefits of environmental regulations range from $121 billion to $193 billion, the costs from $37 billion to $43 billion. In other words, benefits of things like government-mandated clearer air and cleaner water outweigh costs by as much as 5 to 1.

U Turn on the environment?

The trend in recent years - especially with the current administration - has been to cut regulations where possible, or loosen them when outright elimination was politically impractical. Among other things, it has wanted to make it easier for older power plants, refineries, and other industrial facilities to be upgraded without reducing the pollution they emit.

John Graham, head of regulatory affairs at the White House Office of Management and Budget (OMB) and a Bush appointee, once told the conservative Heritage Foundation that "environmental regulation should be depicted as an incredible intervention in the operation of society."

But another trend in judging national wealth (more advanced in Japan and Europe) has been to take into account some of those intangibles - "quality of life indicators" is one popular phrase - when judging the true worth of the more traditional "gross domestic product."

This movement hasn't advanced that far in the United States. But the quantifiable value of things like clean air and water are becoming part of economic calculations, especially among those analysts who call themselves "ecological economists." Much of this is accounted for by the "bads" avoided - premature deaths, the loss of productivity due to environmentally based illnesses, the cost to businesses and governments of treating such illnesses.

That's the kind of thing environmental activists advocate and industry groups resist. Yet many business leaders themselves are becoming "greener" as they see the competitive advantages of matching the public's desire for environmentally friendly products and services. It's the reason companies like Kinkos, 3M, IBM, Hallmark, and Hewlett-Packard have stopped buying paper made from old-growth timber.

The environment is seldom a determining factor in elections. But it does carry increasing political weight, and many Republicans as well as Democrats are recognizing this.

"Americans want strong, impartial enforcement of the Clean Air Act, Clean Water Act, and other laws that safeguard public health," says Jim DiPeso, policy director of REP America, a pro-environment Republican group.

William Reilly, a Republican and head of the Environmental Protection Agency in the first Bush administration, says the environment is "an issue that should not be seen as belonging to one ideology or one party."

"There are many good reasons for the Bush team to give the environment a higher priority," Mr. Reilly wrote in The New York Times earlier this year. "Whether people vote the environment or not ... they still want it protected and improved."

Partisan frustration

This thought is behind the current fight on Capitol Hill over confirmation of Utah Gov. Mike Leavitt (R) as EPA administrator. Governor Leavitt himself is seen as a political moderate and reasonable choice (even by many Democrats) to fill the post left empty when former New Jersey Gov. Christine Todd Whitman resigned months ago.

This week, Democrats blocked a key committee vote on Leavitt, delaying his confirmation for at least two weeks.

Democrats are using the nomination to criticize Bush administration's policies - especially what they see as the move to weaken or eliminate regulations designed to protect the environment. The recent OMB report citing the economic benefits of such regulations gives them more ammunition.

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