Economists Pop Rhetorical Bubble Surrounding Environmental Deregulation | WYPR

Economists Pop Rhetorical Bubble Surrounding Environmental Deregulation

Feb 7, 2018

A Wyoming coal mine
Credit The Billings Gazette

Last week, the U.S. Senate Environment and Public Works Committee held a hearing on the Trump Administration’s management of the Environmental Protection Agency. 

Chairman John Barrasso, a Republican from Wyoming, made a case frequently repeated by the administration: that by eliminating environmental regulations and slashing the budget and power of EPA, President Trump had unleashed job growth and a booming economy.

“The administration’s deregulatory approach is working,” Barrasso said. “According to the last Energy Information Administration quarterly report, coal production in the West is 19.7 percent higher than in the second quarter of 2016.  In addition, the stock market is reaching record, all-time highs.”

That cheerleading faded a bit over the next few days when the stock market plummeted.

Economist Roger Bezdek said it would be wrong to credit President Trump for either the rise in the market – which actually began under President Obama – or blame him for its sudden fall.

“I would be very hesitant to attribute changes in the stock market to any specific policy or regulation,” Bezdek said.

Beyond the stock market fluctuations, economists say there is little to no evidence to back up the central claim in the Trump Administration’s argument for defunding and dismantling EPA: that environmental de-regulation leads to economic growth.

Wayne Gray is a professor of economics at Clark University. He noted that environmental regulations have very little impact on job loss or creation, compared to bigger issues like the price of labor and technological shifts.

“I think that the booming economy – or at least reasonably good growth in the economy – is just part of the trend that was happening well before Trump was in over the last several years, and so I don’t think environmental regulation has much to do with that,” Gray said.

Overall, only two tenths of one percent of layoffs are caused by regulations, according to industry-reported data collected by the U.S. Bureau of Labor Statistics.

“The consensus in the field is that environmental regulations have a net – and I want to emphasize I’m talking net here, for the entire country, across all industries – job growth of zero,” said economist Richard Morgenstern, former senior economic counselor to the undersecretary for global affairs at the U.S. Department of State. “That doesn’t mean that there are not particular individuals in particular places who have lost their jobs from the environment.  But there are also people who have gained jobs from the environment.”

Nationally, the use of coal to generate electricity actually declined by about three percent in President Trump’s first year in office, compared to the last year of the Obama Administration, according to federal data. 

How could this be, given the President’s rollback of EPA pollution control regulations to boost what he calls “clean beautiful coal?” The cause is the free market, economists say.  Natural gas, wind and solar are now just cheaper because of advances in technology. However, Trump recently tried to interfere with these free markets by imposing tariffs on solar panels imported from China.

Those tariffs will raise the price of solar panels which could kill 23,000 jobs at American solar installation companies, the industry warns. That would mean destroying more than twenty times the 1,100 jobs created in coal mining since President Trump took office, according to the U.S. Bureau of Labor Statistics.

Here’s economist and author Eban Goodstein, Director of the Bard Center for Environmental Policy.

“What the Trump Administration is doing is favoring a certain set of industries – dirty industries – over clean industries,” Goodstein said. “And certainly that will see job growth, as a consequence, in the dirty industries, but job decline in the clean industries.”

But even in this, the administration is inconsistent – as witnessed by its recent decision to open up the Atlantic and Pacific coats to offshore drilling, but exempt and protect Florida.  Why? Because the Republican governor of Florida complained about potential job losses in its tourism industry. 

In that case, dirty oil industry jobs lost out to cleaner tourism jobs, although building condos isn’t all that clean, either –just a competing source of campaign contributions. Perhaps we all need a shower after watching the politics in all this.