It can be easy to lose track of all of the federal agencies currently doing end runs around the legislative process with dubious new guidelines and regulations. But one to definitely keep an eye on is the EPA. Their recently unveiled Clean Air Act regulations were advertised by the agency as being expensive, but don’t worry! They’re going to result in two trillion dollars in benefits and an army of new jobs for the “green economy.”
Well, it’s certainly hard to argue with that, isn’t it? The economy is in dire need of a boost of that magnitude and, just as obviously, we definitely need all the new jobs we can get, right? There’s just one little problem with this masterful plan. A recent independent study of the EPA’s cost benefit predictions shows that they are almost entirely vaporware.
In “Assessment of Obama Administration’s Cost-Benefit Analysis of Clean Air Act Regulation,” economist David Montgomery reveals the very large net regulatory benefits touted by EPA rely on apples to orange comparisons, where the vast majority of the benefits have none of the financial reality that the costs do.
“In its Clean Air Act appraisal, EPA substitutes calculated misdirection for solid analysis” explained NTU Executive Vice President Pete Sepp. “Nearly all of EPA’s promised $2 trillion in benefits from existing regulations stem from feelings rather than fiscal improvements.
“Federal regulators arrived at their staggering figures by polling individuals on how much they’d be willing to pay to reduce risks in general, mostly using estimates from studies of occupational risks unrelated to air pollution.”
But the EPA did get one thing right. It’s going to be expensive.
Dr. Montgomery added “while less than 3 percent of the EPA’s purported benefits will show up as additional jobs or real output in the economy, 100 percent of the costs will do so. Even EPA’s own macroeconomic analysis shows that existing air pollution regulations are a net drag on the economy. And EPA’s tally doesn’t even take into account the costs of its pending new ozone standards and regulations on electric utilities over the next decade.”
This type of pie in the sky enthusiasm for creative accounting shouldn’t come as any surprise, as it’s been a hallmark of this administration since day one. Whether it’s the coming explosion of green jobs that simply never happened or sure-fire ways to eliminate coal production which will bankrupt consumers, the laudable goals never seem to match up to the grim realities.
As I’ve stated repeatedly, I’m no fan of coal as a primary energy source, but you simply can’t regulate it out of existence without first coming up with a way to replace all that energy. And the first time a person comes along who can manage that feat in a clean, safe, economically viable way, I’ll be at the front of the line waiting to shake their hand. But we’re nowhere near that point yet. I understand that Congress is often – as my grandfather used to say – about as useful as teats on a boar hog, but in matters such as this we have to keep the legislative branch in the loop. These types of actions can not simply be left to an executive branch entity such as the EPA without oversight. The nation’s teetering economy just isn’t going to survive this type of “help” from Washington.