Green Room

Paul Krugman and the Ozone Fairy

posted at 1:27 pm on September 3, 2011 by

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.

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More of the ‘Broken Window’ fallacy…

catmman on September 3, 2011 at 2:04 PM

Because unless the Ozone Fairy showed up, 565 counties would have suffered economically.

Would have suffered? One county in California had been fined 29 million bucks yearly. Their response was to pass the costs on to those who own cars.

Blake on September 4, 2011 at 9:49 AM

What a yutz.

ZK on September 4, 2011 at 9:50 AM

Now we need the next president to reach the conclusion based on new research results subsequent to the information available to the SCOTUS when it made its Clean Air Act ruling, that CO2 is not a pollutant and nix the Cap and Trade Regulation as well. We also need to go after the Mercury emission regulation to bring it within the reach of reasonably available control technology rather than simply saying it can be achieved by shutting down all the coal-fired power plants.

KW64 on September 4, 2011 at 9:58 AM

Why doesn’t the EPA just outlaw all exhaust emissions and fine everybody until the technology catches up? Makes as much sense as the crap they’re doing now.

cartooner on September 4, 2011 at 10:28 AM

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Jazz Shaw on September 4, 2011 at 2:29 PM