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Job-Killing vs People-Killing, the Case for Regulation

 

Consider the hard-hat. It is required on construction sites, in mines, and so forth. It costs money, so it is a job killer. Would anyone want to eliminate a regulation requiring hard-hats? Doubtful. The connection between risk and protecting lives is clear. The cost is relatively low, and the benefit relatively high.

 

Consider water pollution. EPA regulations require all major industries to install the best practicable treatment for wastewater, before discharge into the waters of the U.S. This levels the playing field for industry, so one location is not easier to pollute than another.

 

Water treatment often is expensive, so it is a job-killer. Would anyone want to eliminate the requirement to clean up wastewater? Doubtful. We want fishable, swimmable, drinkable water. We could and do argue about the level of treatment required, trying to measure the costs against the benefits of each regulation.

 

Consider air pollution. EPA is required to set air quality standards at levels to protect human health and welfare. Again, regulations require treatment before emission of industrial gases into the atmosphere. Cleaning industrial gases is a job-killing requirement. Would anyone want to eliminate the air quality standards? Doubtful, but in this case the link between the costs (measurable) and the benefits (the health of our population) is not as easy to see.

 

The less direct and obvious the links among the risks, the costs, and the benefits, the harder it is to justify imposing costs on business. The analysis can get complicated.

 

While Trump and the Trumpettes thunder against job-killing regulations, few among the press ask questions about the benefits. They have forgotten the balancing act between costs and benefits. More importantly, they have forgotten that every major Federal regulation (cost over $100 million per year) must have a detailed cost-benefit analysis before adoption. (1) They need to look at these analyses and learn how to question the claims of job-killing.

 

Here is a good example: the mercury and air toxics rule (MATS). Coal and oil-fired power plants are required under the rule to significantly reduce emissions of mercury, arsenic, lead, chromium, and acids. In effect, it requires installation of emission control equipment and affects many of the older and less efficient power plants in the nation.

 

Why is the MATS rule important? These power plants collectively emit about 50% of the mercury and 20-60% of the toxic metals emitted annually. These toxic metals can affect the nervous system, causing a range of harmful health effects. There is a significant and long-standing dispute over both the costs and benefits of compliance.

 

EPA’s cost-benefit analysis estimates that for every dollar of cost, there will be around four to nine dollars of health benefits. (2) Now this is a very favorable cost-benefit ratio. Plus, the rule may create over 40,000 short-term construction jobs, and 8,000 long-term jobs at the power plants. The industry, of course, disputes both the costs and benefits, charging that EPA underestimated the costs and overestimated the benefits.

 

EPA estimates the benefits as follows: saving up to 11,000 premature deaths a year; avoiding 4,700 heart attacks a year; avoiding 130,000 asthma attacks a year; eliminating 5,700 hospital and emergency room visits a year; saving 3,200,000 restricted activity days a year; and avoiding 2,800 cases of chronic bronchitis a year. (3)

 

The trouble with these benefits is that they are not easy to see on a day-to-day basis. They only can be tallied on a statistical basis, which is not like seeing dead fish in a stream. Yet, these adverse health effects are real.

 

Consider just the number of premature deaths avoided. Many studies of public attitudes over several decades have concluded that the public puts a price on human life of between $3 million and $9 million dollars. (4) Taking $5 million and multiplying by 11,000 premature deaths gives a figure of $55 billion a year as the worth of the lives saved. Not a bad return on investment.

 

Nonetheless, the Trump administration on 18 April asked the Federal Court of Appeals to delay hearing arguments while it reviews the rule. If Trump abandons the MATS rule, will he be saving jobs or killing people? Will he choose to become a murderer? Think about it the next time Trump calls something a job-killer, or the press forgets to ask about the benefits of regulation.

 

1  https://www.archives.gov/files/federal-register/executive-orders/pdf/12866.pdf

2  https://www.epa.gov/mats/consideration-cost-appropriate-and-necessary-finding-mercury-and-air-toxics-standards-power

3  A good summary of EPA’s analysis is at: https://prezi.com/gebe1nqdgnwf/cost-benefit-analysis-and-mercury-air-toxics-standards/ and in EPA’s fact sheet at: https://www.epa.gov/sites/production/files/2015-11/documents/20111221matsimpactsfs.pdf

4  https://www.theglobalist.com/the-cost-of-a-human-life-statistically-speaking/

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5 May 2017

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Published on the Huffington Post

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Notes On Energy Sufficiency

 

The first thing to notice about energy policy is a moral question: does the U.S. have the right
to consume 25% of the world’s energy resources? Unless one sincerely believes that might makes right, the honest answer has to be “no.” Realistically, of course, it is hard to imagine significant change in our behavior on moral grounds.

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Whether a reduction in our energy use comes from dwindling oil supplies, increased competition from other countries (China comes to mind), or increased costs, a reduction is coming. The interesting thing is that we accept and adapt more easily to such changes if we perceive them as inevitable and uncontrollable, rather than as conscious choices.

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Let’s pretend, though, that we are capable of conscious energy choices. Let’s say that we choose a goal of energy sufficient to maintain our standards of living, rather than all the energy we can eat. What could the U.S. do to pursue energy sufficiency?

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Goal setting, to start the discussion. Suppose we set a goal of an absolute reduction in our current energy use of 50% in 20 years. How hard would this be to achieve? The focus has to be on waste reduction, and with improved energy efficiency.

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Build gas sippers, not gas guzzlers

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The combined auto fleet standard is moving to 35 miles per gallon. Suppose we set a goal of 55 miles per gallon within 20 years? Technologically possible, but something would have to give: heavy or supercharged cars no longer would be common. Do we have a Constitutional right to drive a gas-guzzler? Not really, it is just where the largest profit margins have been, with much advertizing to match.

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Driving more energy efficient cars could be marketed as the patriotic thing to do, even if this is hard to imagine. After all, filling the gas tank sends a lot of money abroad, as a form of foreign tax on driving. Wouldn’t it be patriotic to keep more of that money here? Still, let’s set the goal at 55 mpg, and challenge the auto industry to innovate.

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Stop heating the outdoors

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An enormous amount of energy is wasted in “leaks” from our buildings. The solution is better insulation, but how can this be done?

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First, construction codes need to be stricter, calling for higher insulation values, and for “leak” tested buildings. It is not enough to insulate if the benefits leak away. Of course it is easier and cheaper to require better insulated construction for new buildings, so the problem of our existing housing/office/factory supply also has to be addressed.

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Here, we could create the Insulate America Corps, modeled on the Depression era Works Progress Administration. Say a million people would be trained to install new insulation, and to conduct energy audits of our homes, apartments, offices and factories. This would be an investment with long-term benefits, as passive insulation can save energy for the life of the building. It also would put people to meaningful work.

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Second, we need to rethink our comfort zones. Is it really necessary to cool offices in the Summer to the point where people wear sweaters to work? To heat offices in the Winter to the 70’s? We need a serious effort to reset our thermostats, as the patriotic thing to do.

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Fix the lights

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Replace incandescent bulbs with newer technologies; and install automatic movement sensors which turn off lights when no one is in the room, and turn on lights when movement is detected.

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Make things last

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Planned obsolescence is a major energy waster. Once, washers and driers lasted 20 years or more. Now, most of the market is for machines which may last 5-8 years. Setting new durability standards for major appliances would be a significant energy saver. Washers and driers should be built to last: a 25 year warranty. Cars should be built to last: a 15 year/200,000 mile warranty. Refrigerators should last 20 years. Air conditioners should last 15 years. And so on. We need to think long-term, and support new technologies which produce durable products.

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Change the subsidies

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Ethanol: Congress chose subsidies for ethanol, but there are at least two problems with ethanol production. One, there is not much net energy savings in ethanol production, a point well-documented by now. Two, the diversion of corn to fuel use increased the price for food corn. We need to remove our ethanol subsidies and let the free market determine its place in the energy picture.

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Coal: Coal will remain a major energy source for a long time, but coal is not “clean,” either in extraction or in use. Reducing demand for coal by reducing our energy use will benefit the environment.

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Oil and gas: Domestic oil production has been declining for some time. As we recently learned in the Gulf of Mexico, deep water drilling can be risky. Alaska’s reserves are a tiny part of the need, even if the environmental impacts are ignored and higher production is allowed. Shale and tar-sands are waiting for the technological break-through which will make production both economical and clean.

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Long ago, Congress adopted incentives for oil and gas production which no longer (never?) make sense. The depletion allowance offers tax deductions based upon the volume produced, on the policy that once oil/gas is produced, the companies have less in the ground in future profits. The depletion allowance compensates companies for their depletion of the resource. Today, this policy makes no sense at all. We need to conserve our oil and gas resources, not exhaust them.

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We should abolish the depletion allowance and replace it with an exhaustion tax. This would be an incentive for the energy companies to support energy conservation, to prolong their profits.

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Nuclear power: The nuclear power industry is not cost-effective. It has been supported by a long list of subsidies and incentives. Congress has limited their liability in case of accidents, and provided huge loan guarantees for new plant construction. Many observers have noted that the nuclear industry is price-competitive only with significant government support. We need to eliminate the liability caps, any subsidies, and the loan guarantees. Other forms of energy should receive government support instead. Which ones?

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Renewables: Renewable energy sources, such as solar power and wind power deserve the massive government support which up to now has gone to fossil fuel and nuclear power. Why, because solar and wind are renewable resources, and the U.S. has enormous potential for these sources. This does not rule out support for other new technologies.

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The focus on solar and wind is practical: government support would make a significant difference right now for our energy future. A combination of renewable energy farms and small decentralized solar and wind installations, must be part of our energy strategy. Shortening the grid by decentralizing power plants reduces the energy lost in transmission lines, too.

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A peek at the consequences

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What could be some of the benefits of adopting the goal of 50% energy use reduction?

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o It would drive research, innovation and new technologies, giving us renewed leadership in the market.

o It would foster new businesses and industries.

o It would employ millions, many of whom have been discarded and excluded through the recent recession.

o It would reduce our interest in the Middle East and other oil and gas resource centers, reducing our strategic vulnerability and the temptation for military interventions abroad.

o It would improve efficiency and reduce waste throughout the economy.

o It would pay off in great long-term savings.

o It would be in our self-interest.

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And finally, we could come back to the moral question. It would be the right thing to do for a small planet. It would be sufficient for a high quality of life, without being wasteful or destructive. Some thoughts for the conversation...

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12 October 2010

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Published on Huffington Post

 

Agricultural Reform

 

 

Monoculture: Intensive monoculture, or the use of only one crop variety, has become the main form of large-scale agriculture. While productivity can be high, the costs can be high, too. First, is increased soil erosion. Second, is pesticide dependency, as the pests favoring a single crop can establish themselves year-round. Third, is increased need for fertilizers. Fourth, is the loss of genetic diversity in using only one or a few different varieties of the crop. All of these costs compromise the long-term sustainability of farming.

It is important to reverse our dependency upon monoculture crops. Subsidies have to be eliminated for this kind of farming. Pesticide enforcement needs to be strengthened. Most important, genetic diversity needs to be promoted, or even required.

Factory Farming: Factory farming is heading for a dead end. Raising chickens and hogs, and fish and dairy farming under crowded conditions, increasingly rely upon constant low level doses of antibiotics. Unfortunately, such antibiotic use virtually guarantees development of resistant microbes, and increased cases of widespread disease. Rain runoff contaminated with low level antibiotics help to spread resistant organisms downstream. Farming methods which require constant antibiotic dosing need to be banned.

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Saturday, March 15, 2008

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Energy Independence And Putting People To Work

 

Space heating accounts for about one-third of U.S. energy use. A combination of better insulation and solar heating could save more than half of this energy. At the same time, the construction trades are hurting from the housing crisis, and the economy needs a stimulus.

We should train tens of thousands of new and current workers, to install better insulation and solar heating for most of the nation’s existing housing. This new public works program could start us down a 20 year path to energy independence, be a productive stimulus to the economy, and save enormous amounts of money and resources for the long-term. The major beneficiaries would be the lower and middle classes, both renters and home-owners. However, everyone would benefit from greater energy independence.

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Saturday, March 15, 2008