American Elephants

Representative Vicky Hartzler (R-Mo) inquired of the Environmental Protection Agency of the economic impact and employment consequences of its initiatives. Assistant EPA Administrator Gina McCarthy was very clear in her response:

Under the Clean air Act, decisions regarding the National Ambient Air Quality Standards (NAAQS) must be based solely on evaluation of the scientific evidence as it pertains to ;health and environmental effects.  Thus, the agency is prohibited from considering costs in setting the NAAQS.

Responding to a question by Representative Cory Gardner (R-Col) before the House Environment and Energy Committee regarding regulations that would govern industries that recycle coal ash and other fossil fuel byproducts for concrete, wallboard and roofing materials, EPA Administrator Mathy Stanislaus stated:

We have not directly taken a look at jobs in this proposal.

President Obama issued an Executive Order 12563 in January that specifically required that all new rules issued by federal agencies take job creation into account. Everybody has suggestions about what President Obama can do  to get the economy moving again. The EPA is currently pushing an extensive rewrite of air-pollution rules in an attempt to shut down a big chunk of America’s coal-fired power plants. I’m sure you remember Mr. Obama’s pledge to bankrupt the coal industry.

Coal-fired power plants provide 40% of U.S. baseload capacity in the United States, and almost half of net power generation.  The EPA has their agency eye on about 8% of all U.S. generating capacity.That doesn’t sound like much until you recognize that it the equivalent of wiping out all power generation for Florida and Mississippi.

In practice, this means blackouts and rolling brownouts, and rising electricity rates for consumers. As the Wall Street Journal says, if terrorists did that in  a cyber attack, it would be considered an act of war.

Later this year, the EPA will release regulations that require utilities to further limit mercury and other “hazardous pollutants.” Full compliance will be required by 2015, 36 months after the final rule is public and plants that can’t be upgraded in time will be required to shut down.  The industry says that the average lead time for retrofitting scrubbers was 52 months.

The Clean Air Act was revised in 1990, and the amendments added at that time contain a proviso that would allow Mr. Obama overrule EPA Administrator Lisa Jackson, exempting all power plants from compliance with any standard  or limitation for two years. None of these regulations were demanded by  Congress, but are the result of bureaucratic discretion. The big question is whether the Administration’s green campaign is more important than the country’s economic growth.

The EPA’s own estimate is a cost of $11 billion annually., but that’s a lowball estimate.  Don’t expect Mr. Obama to rein in his regulators. He has already demonstrated that his green priorities are more important to him than American jobs.

Annual federal funding for policies purportedly directed at climate change has been increasing substantially.  According to the GAO, annual climate spending has increased from $4.6 billion in 2003 to $8.8 billion in 2010 — $106.7 billion over that period. That’s for technology for reducing greenhouse gas emissions, science to understand climate change, international assistance for developing countries, and wildlife adaption to changes. That doesn’t begin to count  all the regulation costs.

The Small Business Administration estimates that compliance with such regulation costs the economy more than $1.75 trillion per year, about 12 to 14% of GDP, and half of the $3.456 trillion Washington is currently spending.  The Competitive Enterprise Institute believes the annual cost is closer to $1.8 trillion.  CEI further notes that these regulation costs exceed 2008 corporate pretax profits of $1.436 trillion. That’s alarming.