Clean Air's High Cost
President Clinton has approved the Environmental Protection Agency's proposed new air quality standards after a divisive debate within his own ranks. Now Congress will wage its own battle over the controversial standards. Much is at stake.
Anyone who has wheezed along behind a truck's exhaust fumes or stood in line behind a cigar smoker knows at least something about air pollution. Being able to breathe clean air surely ranks near the top of our needs. We can't very well buy clean air the way we can buy pickles, although as a last-gasp strategy in heavily polluted cities like Mexico City, enterprising outfits have considered marketing five-minute shots of clean air from sidewalk vending machines.
Instead, we turn to government to issue regulations requiring firms to restrict pollutants from their operations and products. These firms then increase their prices to cover the pollution control costs, just as they do when raw material prices rise. When government regulations get the job done sensibly, these higher prices reflect good public policy. The EPA's decade-old regulation forcing refiners to stop adding lead to gasoline was a prudent way to remove hazardous lead particles from exhaust fumes. This rule's substantial costs were far exceeded by the important public health gains that followed.
Good intentions gone awry
Unfortunately, many regulatory initiatives lack this type of common sense return on the investment costs they impose. The Clean Air Act directs the EPA to adopt pollution regulations that protect public health regardless of how costly or infeasible they may be. The two multibillion-dollar air-quality proposals approved by Mr. Clinton are a vivid and troublesome example of good intentions going awry. If the EPA adopts its proposed new standards for airborne particulates (soot) and ozone (smog), firms soon will find it necessary to develop costly new controls that will provide far less health protection than could be produced from other regulatory priorities.
The EPA's current strategy amounts to a coupling of noble intentions with tunnel vision. Costs are to be heaped on producers as, one by one, a variety of pollutants are reduced down to nearly zero risk levels. By the EPA's own calculations, its proposed ozone rule would mandate costs that far exceed the agency's estimates of the value of improved health effects. Its proposed particulates rule is not supported by a majority of the agency's scientific advisers, who question its health benefits. Yet it's so stringent that many firms would find their regulatory cost burden doubled.
Meanwhile, other opportunities to reduce premature fatalities and illnesses are being slighted for want of funding, such as programs of child immunization. Recent Harvard University research concludes that retargeting existing regulatory investments would more than double our nation's ability to save lives.
Existing EPA goals adequate
This is not a pitch for more clouds of soot in the air. Indeed, even without new regulations, the beneficial effect of working toward compliance with existing regulations assures a steady, year-by-year decline in our pollution problems. The EPA's latest annual assessment of air-pollution levels shows that particulate emissions fell 79 percent from 1970 to 1995. This improvement is all the more remarkable since it occurred while pollution-generating activities were rising: Gross domestic product rose 99 percent, and US population increased 28 percent.
The question the EPA should be answering is whether we want to accelerate progress on smog and particulates while we pass up the greater public health improvements the same outlays could produce elsewhere - on more concerted efforts against lead paint poisoning, water quality problems, etc. Regulatory compliance costs already are running at nearly 10 percent of the nation's total income - about $6,000 per family per year - so wise choices are important on what costs to increase.
It's time to base decisions on data rather than on hope and good intentions.
* Thomas D. Hopkins is an adjunct fellow of the Center for the Study of American Business at Washington University in St. Louis and the Arthur J. Gosnell Professor of Economics at the Rochester Institute of Technology in Rochester, N.Y.