Paul Krugman and the Ozone Fairy
posted at 1:27 pm on September 3, 2011 by Karl
Pres. Obama abandoned a controversial new proposed EPA rule regarding so-called ground-level ozone on Friday, angering lefties in general and environmentalists in particular. Nobel Prize-winning economist and former Enron adviser Paul Krugman is among those in despair, arguing the decision is “definitely a mistake” as a matter of economics:
[T]ighter ozone regulation would actually have created jobs: it would have forced firms to spend on upgrading or replacing equipment, helping to boost demand. Yes, it would have cost money — but that’s the point! And with corporations sitting on lots of idle cash, the money spent would not, to any significant extent, come at the expense of other investment.
The proposed EPA rule did contemplate that a lot of money be spent. Indeed, House Speaker John Boehner singled out this proposal in a recent letter to Obama precisely because the estimated cost ran as high as $90 billi0n per year. But Krugman’s argument has at least one itsy-bitsy little flaw: the technology required to meet the standard EPA proposed does not exist. Yes, really. Here’s what the EPA had to say about it (.pdf):
o The supplement to the [Regulatory Impact Analysis] assumes that the proposed standards can be achieved throughout the U.S. using a mixture of known air pollution control technologies and unknown, future technologies.
o The annual control technology costs of implementing known controls as part of a strategy to attain a standard in the proposed range of 0.060 ppm or 0.070 ppm in 2020 would be approximately $3.3 billion to $4.5 billion. EPA used several statistical methods to provide a range of likely compliance costs for other, currently unknown technologies that would be needed to attain the proposed primary standards.
Of course, if Krugman can wish for the economic stimulus of an alien invasion, I suppose he can also wish for the economic stimulus from the Ozone Fairy. Because unless the Ozone Fairy showed up, 565 counties would have suffered economically.