Do environmental regulations do more harm or good? Presidential candidates disagree

Factory smokestacks, Milwaukee, Wisconsin. Joe Brusky/Flickr, CC BY-NC

The first Earth Day was organized on April 22, 1970 to force U.S. leaders to address rising public concerns about pollution and waste. In an election year, it’s a fitting time to compare the leading presidential candidates’ approaches to environmental regulation.

Their proposals range from completely eliminating regulatory programs and institutions to significantly expanding federal regulatory power. These extreme differences reflect basic disagreements about the effects of environmental regulation.

Republicans Donald Trump, Ted Cruz and John Kasich see environmental protection as a dire threat to jobs and economic growth. In contrast, Democrats Hillary Clinton and Bernie Sanders contend that it can both conserve resources and increase economic prosperity.

The best way to evaluate these very different views is to look at the evidence related to them – and, indeed, to ask whether the candidates accept scientific or technical evidence at all.

Stark differences

All three Republican candidates want to drastically shrink federal environmental regulation. Donald Trump has called the Environmental Protection Agency (EPA) “a disgrace” and pledged to “get rid of it in almost every form.”

Ted Cruz has called EPA regulation of carbon pollution from power plants “lawless and radical” and “flatly unconstitutional.” Along with curbing EPA, Cruz pledges to eliminate what he calls the “federal ABCs” (agencies, bureaus and commissions), starting with 25 federal agencies and programs. His list includes the federal government’s most important initiatives for addressing climate change.

Similarly, John Kasich has called for repealing rules that would curb climate change. Kasich also has proposed that government agencies meet certain requirements before introducing new environmental regulations. They include cost-benefit analysis of new rules; requiring congressional approval for rules costing more than US$100 million per year; and freezing major new regulations for one year while the new administration develops plans for regulatory reform.

EPA Administrator Gina McCarthy discusses plans to revitalize the Los Angeles River. Jay Field/Flickr, CC BY-ND

In contrast, the Democratic candidates embrace EPA’s regulatory power. Hillary Clinton’s central environmental proposal is to make the United States the world’s clean energy superpower in this century. Clinton has proposed multi-billion-dollar plans to support climate-friendly initiatives at the state and local level and to revitalize coal-dependent communities in the new energy economy.

Bernie Sanders has called for a carbon tax, a ban on “fracking” for oil and gas, elimination of subsidies and tax breaks for the fossil-fuel industry, and the creation of a “100 percent clean energy system.” Like Clinton, Sanders would provide aid to coal communities. His environmental positions appear to have shifted Clinton’s views on issues such as fracking and the Keystone XL pipeline to the left.

Costs versus benefits

The candidates’ prescriptions reflect deep divisions over the effects of environmental regulation. On the right, particularly since the Great Recession of 2007-2009, politicians have associated environmental regulation with job losses and economic decline. These claims have increased, not decreased even as the economy has improved.

Republican presidential candidates assert that environmental regulations cause severe economic harm and produce minimal benefits. Ted Cruz contends that federal regulation in the United States costs some $2 trillion per year. His campaign materials pervasively pair the adjective “job-killing” with the noun “regulation.”

John Kasich asserts that the Obama administration’s Clean Power Plan to lower carbon emissions from power plants will “drive up electricity costs and make entire economic sectors uncompetitive.” He also argues that states should be allowed to regulate fracking without “job-killing federal interference.” The empirical premises of Donald Trump’s views on environmental regulation are murkier, but he appears to accept the same basic views.

The Republican candidates also are willing to question the science that underlies environmental regulation, especially with respect to climate change. Donald Trump and Ted Cruz do not believe that greenhouse gases caused by human activity are leading to climate change. John Kasich has been more willing to accept this scientific connection, but he nevertheless has called for rolling back climate change regulations.

Conversely, the Democratic candidates contend that environmental regulations produce large benefits and manageable economic impacts. They also emphasize their deference to scientific evidence.

Bernie Sanders projects that his clean energy plan will create 10 million new jobs through the transition to a new energy system. Hillary Clinton also predicts that this transition will generate new jobs. At the same time, by proposing relief plans for coal communities, both candidates recognize that this transformation will create losers as well as winners.

Who has it right?

Research on the costs and benefits of environmental regulations shows that Republican candidates’ warnings of job destruction and economic decline are greatly exaggerated. In a recent assessment of the available empirical evidence on the relationship between employment and regulation, prominent scholars found “little or no aggregate net effect of regulation on jobs,” although local and individual effects do occur.

Candidates’ assertions about the economic costs of regulation are also exaggerated. The studies underlying the $2 trillion dollar estimate of the annual cost of regulation cited by Cruz are deeply problematic. When a coauthor and I reviewed the original study that proposed this figure, we found numerous errors.

Specifically, the study misinterpreted a World Bank database and drew unsupportable conclusions from it. The study also included the costs of rules that did not exist because either agencies or courts pulled them back. It relied on a 1974 study by the National Association of Manufacturers to estimate the cost of workplace safety regulations today, and double-counted rules in estimating costs.

Even when performed more carefully, estimates of regulatory costs have often proved too high. For example, the actual costs of the national emissions trading program targeting acid rain (created in 1990 amendments to the Clean Air Act) were far lower than the costs estimated as Congress debated the program. There were several reasons for the overestimation. Notably, it did not account for technological changes that would occur due to the regulatory program itself.

Huge estimates of regulatory costs, standing alone, also ignore the losses – in environmental integrity, human health and economic prosperity – associated with environmental harms. According to a peer-reviewed EPA study, the Clean Air Act alone will prevent over 230,000 premature deaths in 2020, and return more than $30 in benefits for every dollar spent in costs.

Democratic candidates say environmental regulations will generate thousands of green jobs. Elena Elisseeva/Shutterstock

The Democratic candidates’ boldest proposals involve direct injection of billions of dollars into programs aimed at creating a new energy economy. These proposals, they say, will create new jobs and ease the economic strain for workers left behind, specifically in the coal industry. Sanders promises 10 million new jobs; Clinton touts job creation but does not promise a specific number.

Based on experience with the stimulus legislation passed during the Great Recession, it is not unrealistic to predict job growth as a result of an infusion of federal funding of the magnitude the candidates are proposing. However, Sanders’ promise of 10 million new jobs is hard to square with existing evidence. For comparison, last year the consulting firm Synapse Energy Economics published a plan for transforming the energy industry, including reducing coal-fired power by 50 percent and cutting greenhouse gas emissions over 80 percent. The plan estimated that these steps would create something closer to 500,000 jobs.

Sanders’ – and Clinton’s – positions may be viewed as unrealistic from an even more practical angle: they each call for multi-billion-dollar investments to transform our energy industry. Enacting these proposals would require congressional action, which itself is an endangered resource in Washington today. For my part, though, I would prefer bold hopes in the face of political challenges over flat denial in the face of environmental catastrophe.

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