In January 2009 I was awoken by the sound of my eldest child wheezing and gasping for air. We called 911 and emergency personnel arrived to give her some oxygen. After a short time they determined it was a severe croup episode and not, as I feared, a first asthma attack. But that is a night I will never forget. The fear you feel as a parent when your child cannot breathe is intense. Millions of parents live with that background fear on a daily basis because their children suffer from chronic asthma. The Centers for Disease Control estimate that 7.0 million children (9.4%) have asthma as do 17.5 million (7.7%) adults.[i] Asthma results in 17.0 million health visits per year, 450,000 inpatient hospital stays with an average length of 3 days, and 3,447 deaths.[ii]
What does all this have to do with Environmental Economics?
President Obama recently asked EPA Administrator Lisa Jackson to withdraw a proposed refinement of the National Ambient Air Quality Standards (NAAQS) for ground level ozone that would have lowered allowable ozone levels from 0.84 parts per billion (ppb) to a range of 0.60 to 0.70 ppb. Ground level ozone (not to be confused with stratospheric ozone which has the big hole) is also known as smog, and is a key contributor to asthma and other illnesses and deaths.
To be fair, the ozone NAAQS will be revisited in 2013, so Obama’s decision really only put off the debate for two years. But why delay two years when the rule was ready to go forward now? Must be economics. Or is it?
In announcing his decision, President Obama said “I have continued to underscore the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover.”[iii] The announcement was made shortly after a bad jobs report was issued which further enhances the appearance that the postponed regulation was a “job killer.” But the jobs versus environment rhetoric is just that—rhetoric. It has no basis in economic analysis because economic analysis is not based on counting up jobs!
A good economic analysis compares the costs of complying with the regulation to the benefits resulting from the regulation. The benefits in this case are the health benefits associated with reduced incidence of asthma and other health impacts. Compliance costs include costs of purchasing new pollution control equipment, changing fuel sources, changing operational practices, and so forth. The jobs analysis is really a non-starter. Could we lose some jobs if we require more regulatory expenditures—certainly. Could we gain jobs in industries that are selling and developing pollution control equipment–certainly. Are these exactly a wash—probably not. But we will also reduce hospitalizations, school days missed, and even deaths from asthma and other illness. The key is that economic analysis is not “jobs analysis.” We do our best to measure the benefits and the costs of compliance in dollars. Then we can compare dollars spent to dollars gained and not compare jobs to asthma cases.
So what did the economic analysis of the proposed ozone rule say about the costs and benefits of tightening the standard? Not a lot that is useful, unfortunately. This is not because the economic analysis is badly done (although I might quibble a bit on a few points), but rather because there is significant uncertainty over both costs and benefits of the proposed rule. There are at least three major sources of uncertainty in the economic analysis.
- Modeling uncertainty: Ozone isn’t a pollutant that gets directly emitted from smokestacks or tailpipes. Ozone is the result of combining two other pollutants, NOx and VOCs, with sunlight. As a result, you have to model the ozone-generating process and estimate how many counties might not be in compliance when the rule becomes binding in 2020.
- Cost uncertainty: Once you estimate which counties would exceed the standard you need to come up with estimates of compliance. But for some counties it was estimated that compliance was not possible with known technologies. Compliance in 2020 relies on technologies that we don’t know about in 2011 and cannot accurately price. It also relies on estimates of how costs of current technologies may change over the next 9 years.
- Benefits uncertainty: The benefits estimates rely on models of the relationship between ozone levels and deaths and illnesses. There are several different models available in the peer-reviewed literature including three meta-analyses, yet these models still give answers that vary significantly.
These uncertainties mean that for each of the standards considered there is a large spread in estimated costs and estimated benefits such that the range of possible net benefits (benefits minus costs) always straddles zero. The figure below captures the highest and lowest benefit and cost estimates for each standard. You can see that the uncertainty in benefits is greater than the uncertainty in costs at all levels and that the uncertainty in both benefits and costs increases as the standard becomes more stringent.
click image to enlarge
Figure Source: United States Environmental Protection Agency. Summary of the updated Regulatory Impact Analysis (RIA) for the Reconsideration of the 2008 Ozone National Ambient Air Quality Standard (NAAQS). January 1, 2010. Available at: http://www.epa.gov/ttnecas1/regdata/RIAs/s1-supplemental_analysis_full.pdf. Last accessed, September 7, 2011.
With this much uncertainty in both costs and benefits, reasonable people could certainly disagree about the best course of action. I personally was very disappointed in President Obama’s decision. I would strongly support an increase in stringency for the ozone standard based on the economic analysis presented in the Regulatory Impact Analysis.
How could I feel so strongly given all the uncertainties? The reason is that historically we have systematically underestimated benefits from air pollution regulations and overestimated costs. The retrospective benefit-cost analysis of the Clean Air Act from 1970-1990 estimated total benefits attributable to air regulations between 5.6 and 49.4 trillion dollars with a central tendency of 22.2 trillion. The total costs were roughly 0.5 trillion. That means that we are better off by around 21.7 trillion dollars because of these regulations.[iv]
Furthermore, most of the “unexpected” gains in benefits came from regulations of particulate matter. The proposed ozone rule lowers emissions of NOx which also results in lower emissions of small particles (PM2.5) which are very harmful for health. So if I had to bet on where we were likely to end up on the “distribution” of net benefits I would place my bet on higher end of the range. And that means I’m betting that we are better off as an economy with more stringent ozone regulations. I wish President Obama hadn’t caved to political pressures and supported his EPA Administrator in making that same bet.
[i] Centers for Disease Control and Prevention. Fast Stats: Asthma. Available at: http://www.cdc.gov/nchs/fastats/asthma.htm. Last Accessed: September 8, 2011.
[ii] ibid
[iii] White House. Office of the Press Secretary. Statement by the President on the Ozone National Ambient Air Quality Standards. September 2, 2011. Available at: http://www.whitehouse.gov/the-press-office/2011/09/02/statement-president-ozone-national-ambient-air-quality-standards. Last Accessed: September 9, 2011.
[iv] United States Environmental Protection Agency. The Benefits and Costs of the Clean Air Act, 1970 to 1990. Executive Summary. pp: ES-8. Available at: http://www.epa.gov/oar/sect812/1970-1990/812exec2.pdf. Last Accessed: September 8, 2011.
After reading Doctor Bennears blog on the economics of ground-level ozone I agree with her notion that benefits tend to be understated and costs overstated with pro-environmental legislation. I understand her viewpoint that there is a sense of urgency in enforcing stricter laws that cut back on pollution, specifically NOx and VOCs, because of the externality benefits that will ensue. However, from a macro-economic perspective one could argue that the decision to delay the debate on this legislation may help the US economy in the near and mid-term.
The current economy is struggling to grow with unemployment in the 9-10% range. This number itself is underestimated because it doesn’t represent people who have given up on finding a job, thus unemployment is probably significantly higher. The delay in the debate allows company’s significant amount of time to plan and alter their operations to comply with the coming legislation. If the laws were set to go in effect in the near future, companies would have to cut costs in one area in order to offset their costs of compliance. Jobs are usually the most liquid in terms of cutting costs, thus if the legislation were going to pass in the near term then unemployment numbers would increase.
One could see this as a political move from Obama who is trying to halt his wavering approval rating with an election approaching. Even if this is true, I believe giving companies enough time to plan will allow them to not take the immediate action of firing people. Companies can plan accordingly and find ways to minimize costs of complying without firing people.
Furthermore, one could also argue that technology today will be cheaper in the future. If the price to meet standards, with today’s technology, in three years time is eighty percent cheaper than today then that technology can be installed at a discount. That discount alone may be enough to save jobs and keep the economy from falling back into a recession (not sure on how large of an impact it would actually have).
I am not one to sacrifice the health of children for jobs, but from a strict economics viewpoint the argument is there to prolong the debate on smog. Dr. Bennear raised the notion that thousands of visits to hospitals a year are attributed to increased ground-level ozone. People who respond to 911 calls, doctors, nurses, and pharmaceutical companies benefit from increased ground-level ozone. This sounds sadistic, but I am merely stated the situation from a realistic viewpoint.
This is a difficult situation because who doesn’t want children to live a healthier life? I personally would pass the bill because economic analysis clearly shows in the long run that everyone will be better off. If kids can grow up healthy and live longer then they can contribute to society, thus potentially increasing GDP. I would like to see doctors not benefit from the irresponsibleness from companies. If the legislation can be passed, which I am sure it will eventually, then doctors can focus on sicknesses and other life threatening ailments that have no remedy. In the long run, it makes economical sense to pass this legislation, but given the current political and economic environment I am not surprised by Obama’s decision.
I too was disappointed by the decision, though it appears to be a political one, in which economic analyses – however sound – may be ignored altogether for political prudence. The fact that the economic analysis behind this proposal intrinsically contains so much doubt only adds support to the decision to delay its passage. The bottom line for me is that monetizing health-related issues is exceptionally difficult and often inappropriate; a necessary evil. As Dr. Bennear noted, estimates of health benefits to this kind of legislation vary wildly, though I would agree that they are nearly always underestimated. A parallel comes to mind when considering the health of our planet and the effects of the loss of biodiversity and tropical forests. In such an analysis, can biodiversity be monetized? Some argue yes, and have done so, but how could an economic analysis possibly account for the value of an invaluable asset? Human health is one such invaluable asset that, try as we might, we will never fully account for.
Obama’s decision looks like one of political sacrifice, but I think that’s just how it was framed in terms of jobs vs. health. To be honest I think it would be more productive for him to rally his base by allowing this rule to become final than to appease a vocal yet ill-informed congress.
Anyway, there’s got to be more to his decision than just political posturing. It makes enough economic sense to implement this rule even while the job market isn’t strong. The real issue is that a review of the ozone rule will be completed in 2013. We might as well wait until we know the results– they could pave the way for a standard that is better than 60-70ppb. No use spending taxpayer dollars implementing a rule that could be revamped before it has a chance to succeed.
While I understand that benefits need to outweigh costs for a decision to be considered favorable, it is almost inconceivable to think that the health of children, adults and our planet, could be topped by anything else. The priorities here are in desperate need of a major shift, as is the case with most other environmental issues. The most basic needs for both us and our environment, such as the ability to breath easily without medication, should not be considered in strictly monetary terms.
Delaying more stringent regulations will only make it more difficult to “clean up” in 2013. What would be the case if the Endangered Species Act or the Clean Water Act or the Clean Air Act had been delayed for two additional years? We are only enhancing the problem for the future.
For the most part, I agree with Dr. Bennear as well as with the comments. I believe it was a political decision to delay the implementation of these regulations, but there are also some economic arguments to it.
Labor is a variable cost, so if the cost of production increases due to government regulation, it seems logical that companies would choose to lower these costs and cut their workforce (although, I’m not sure if it would be by as much as they said). The benefits are also uncertain (it’s not like we’re going to have a healthier population overnight; and even the meta-analyses varied significantly).
So, in the face of all this uncertainty, what would a ‘rational’ human being do? Well, on one side, the costs will always be taken into account more than the benefits. This is part of the reasoning behind the willingness-to-pay and willingness-to-accept concepts. A person gives more value to something he/she already has and is being taken away, than to something he/she doesn’t have and might get. And, if unemployment was still high, half the country (and some very prominent economists) is not happy with the way you’ve been going about trying to create jobs, and you had a reelection coming up, I bet you would prefer annoying the environmentalists just a little bit (’cause it will be implemented in two years) than keep fueling the criticism towards you. It all follows the median voter theorem. Moreover, businesses have greater collective action power (aka: money) than families with asthmatic children, and the rhetoric of a great number of jobless parents could be more powerful than that of asthmatic children with working parents.
Plus, the benefits are even less important in this situation because the way we measure our GDP right now doesn’t take into account increased health benefits or a healthier population (or less asthma attacks…which really suck… :-/). While these benefits are not monetized in our national accounts, some of our defense/remedial expenditures do (health expenditures, hospital visits, medication, etc.). This makes an even stronger case for not hurting the economic indicator that people actually follow (with all its problems).
Don’t get me wrong. If it were me, I would definitely pass the bill. But, if I were Obama, I’d have to say that I’m really not sure. After all, this could’ve alienated him more from a desperate lower class who can’t find jobs, and who might think that having food on your plate and a home comes before breathing cleaner air (that might or might not kill you). Plus, it might be better for him to keep moving to the center. We could end up doing worse environmentally after 2012 if Perry or Romney win.
I don’t want to turn this into more of a political discussion than it already is, but the unfortunate truth about national politics is that “protecting jobs” seems to trump just about anything else…save for, ironically, children – but there are too many steps between air pollution and children’s lungs to make for a good sound bite on the news.
But really, I have nothing to add that this post didn’t already say. I was disappointed with the decision, and looking at the information available, I, too, would have bet that the estimates were severely underestimating the benefits we’d see in the long term.
But hey, I guess environmental economists are just part of the long line of scientists that are summarily ignored in political decisions. I guess all I can hope for is after election time is over – i.e. 2013 – this will pass no problem. (He says naively.)
I think it is out of political reasons that president Obama withdrew the NAAQS, which is really disappointing. I agree that “most of the ‘unexpected’gains in benefits came from regulations of particulate matter.” just like the clean air act, it gained 21.7 trilion dollars from the regulations. So, withdrawing the regulation will do less to increase job, but will increase the burden in two year. Government should never try to search short term benefit without considering the health of people.
I would agree that this decision was a political move, particularly with a pending election. However, I think that there a couple points missing from the discussion that I would like to mention. First, I think people are forgetting that it takes a very very long time to actually implement any regulation that is passes for the EPA. Even then something is passed it becomes tied up in court for years before they can act on it. This would be an argument to get the process started as soon as possible because the longer we wait the more harm will be done.
Additionally, I think that people have neglected the fact that political uncertainty in itself has several costs that are significant but hard to account for. I believe the first reply mentioned that delaying the bill would allow technology to advance and potentially become cheaper. While this is possible, it is more likely that until there is more political certainty it will be very difficult to find funding for technology development. This can be shown with corporations that are stalling in their efforts to deal with climate change. They say they are waiting to find out what the government regulations are going to be before they will act. This is detrimental to everyone. Unfortunately, I have no idea what the right answer is but given government regulation can take so long I think the sooner regulators send a clear message to industry the better.
I do agree with much of what has been said. Nonetheless, I would like to enrich this debate with insights from a recent discussion with an Associate Director in the Office of Air Quality Planning and Standards of the EPA.
To begin with, (s)he confirmed what Courtney has pointed out to: a comprehensive standard review such as for ground level ozone levels takes the EPA around three years – at least. The 2013 review is already under way and is likely to further enhance existing economic analysis through new data. What is more, given that there is no economically sound “one size fits it all scrubber solution”, finding adequate individual solutions to implement new standards tends to require roundabout another three years.
Secondly, it should also be noted how positive ozone ground levels have developed since 1990: e.g. NOx emissions from power plants have decreased 68% regardless of a significant increase in electricity demand (Edison Electric Institute 2011: 29 – based on data from the EIA, the EPA, and the BEA). This is despite of what s(he) recalls an incredible impatience at EPA back then for regulations to be finally passed and implemented.
Lastly, a third insight that should be taken into account when criticizing President Obama is what (s)he experiences as the currently most frustrating side to her/his work: the most divided Congress in history blocking every major environmental policy initiative on principle rather than out of (economic) reason.
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Edison Electric Institute (EEI) 2011: Electricity 101 – A Brief History of the U.S. Power Industry, retrieved 09/12/2011 from http://www.eei.org/whoweare/AboutIndustry/Documents/Electricity101.pdf.
The last few years of watching both the economy falter and political processes fail to fix any of our problems is fustrating, and this is another great example of a sitting president caring more about trying to get re-elected than about finding solutions. I agree with Dr. Bennear that this is almost a no-brainer. Politicians routinely assume that stringent regulations and environmental policies kill the economy, but I believe they are mistaken in this case. It’s also frustrating that the people making the decisions about the environment where it matters (making laws) are people who don’t know much about the environment, and are always more worried about getting elected. Ok, enough venting. Given the argument that Dr. Bennear makes, I would totally agree with imposing more stringent regulations for ozone production. I would also like to see the EPA bring up some of these issue in future studies that show the history of costs/benefits related to air quality standards, and how they are over/under-estimated respectively. Lastly, I would like to see more regulatory control go to the scientists and economists, not the politicians. Politicians have one goal in mind, to serve their constituents, and get elected. These are both counter-productive to almost any environmental policy that affects the nation and world as a whole.
I agree with many of the comments posted so far; however, I decided to take a different spin for my response (I know, it’s a stretch)…
With an imminent election, President Obama has chosen “jobs” over “health”. Here is our first flaw, “health” and “jobs” are not mutually exclusive. Increasingly, studies are coming out with more information on how unemployment affects one’s health. For example, there is a positive association between the incidences of suicide, anxiety, and depression with higher rates of unemployment (http://www.ncbi.nlm.nih.gov/pubmed/8724235). Additionally, the emotional stress of being unemployment can negatively impact an individual’s eating habits (http://www.psychologytoday.com/blog/food-thought/201106/the-depressing-truth-about-unemployment). Americans not only gravitate toward comfort eating, but they also choose foods that are less expensive. This trend generally means more individuals are purchasing products that are unhealthy and not sustainable. The food brought home will affect the children’s health and will also “starve” them of an education in nutrition. Maybe benefits of air pollution regulations are historically underestimated, but I question whether some health benefits from the other side of the spectrum are even being considered.
While a part of me would really like to vent some anger about Obama’s decision, I think earlier commenters have already covered most of the things that really upset me so I’d like to bring up a few thoughts I had that branch off from different points of the blog.
The notion (from comments above) that Obama’s decision would avoid alienating/angering lower class families by choosing jobs over health is somewhat unclear to me . A lot of lower class families live in the middle of cities or near factories etc. where housing is more affordable but the pollution is often the worst. While I don’t know the precise statistics, I can say from personal experience that there are A LOT of kids who live in these areas that have asthma and other chronic respiratory illnesses. Their parents have to pay for their doctors and hospital visits. Those bills can be HUGE! I went to an elementary school beside one of the largest and most crowded freeways in California and I remember how much my parents worried that I would develop asthma or some other respiratory problem. And their fears were not at all unfounded – the majority of my friends had asthma at that school.
I think that Obama could have allowed the rule to pass and easily spun his decision in such a light that parents especially would have seen the benefits of the decision. Unfortunately, there is no clear answer here. Either option (passing or not passing the rule) has benefits and costs, which we have determined are not easy to calculate and can vary greatly. But Dr. Bennear is not the only parent out there that fears for their child’s health and I think a lot of parents would put their child’s health as a huge benefit worth incurring some costs. For those that are already unemployed, the increased loss of jobs that COULD occur from stricter regulations may not change their potential job situation very much (low cost) and has great potential to benefit their child’s health.
A difficult point in this discussion/argument is that we are having to put a dollar value on human lives. There is no way to do this such that everyone would agree. A parent would value their child’s life above their own, but an argument could be made that the parent’s life has higher value because of his/her ability to contribute to society & the economy today instead of several years from now – much like the example we had in class on Tuesday, would you take $1000 now or $1100 a year from now? People are going to have different answers.
Stepping away from the child health aspect, I also wondered how the proposed rule would deal with cities that were predominantly industrial when it decided on the county compliance levels. Places like Silicon Valley are loaded to the absolute limit with industries and factories, so they would probably have a really hard time complying with stricter regulations. Will the new rule allow for buying & trading pollution permits? For example, could Silicon Valley buy pollution vouchers/permits from neighboring cities/counties that don’t need them because they are already complying with the stricter regulations?
Environmental economics presents a unique challenge when doing cost-benefit analysis. Usually when society is faced with the need to make a decision, there is a straight forward decision process in which maximum utility is reached based on society’s preferences. However, environmental economics holds a unique and confounding caveat to the wonderfully simple and efficient process of benefit-cost analysis; the goods are often actually bads, and these bads don’t just hold a present value, they also hold a future value. Pollution is bad right now, but the same pollution (or more of it) will also be bad in the future; it’s not a normal consumable. It is because of this irregularity that society’s preference for a healthy environment (assuming they have that preference) is often regarded as a preference that requires 3rd party supervision. Even with public knowledge of what ozone does to our environment, what it does to our health, and the implications this has for future generations, we continue to produce goods (and defend jobs) that generate ozone. While it might seem obvious to certain environmental protection enthusiasts (a.k.a. smart people) that the costs of pollution are nearly infinite because of ecological complexity and evolving effects of unprecedented toxins in our world, people’s present benefits such as their job security (whether it be real or imagined) hold, at present, more value than the possibility of future costs. So, while Obama’s decision regarding ozone regulation may be maddening, it is presumably the correct answer to society’s cost-benefit analysis of the ozone EPA policy; case in point, Obama’s approval ratings are expected to get a boost. If environmental quality was much poorer for a larger number of Americans, or the economy was much stronger, the public preference may have been to enact the ozone regulation, but it wasn’t, so that’s the end of that…until 2013.
I’m just thinking about the winners and losers from passing or not passing this refinement of the bill. There definitely is a an unequal distribution of benefits and losses here.
Job seekers have been hurt really badly in the past 2 years. Unemployment stands at 9.1% currently, which is a mind-blowingly high number, when you realize that it was just 5% in 2008 before the Great Recession. That’s almost 10% of the population who is looking for jobs and can’t find it. And this probably will be status quo for the next few years. We could say that there is a very inelastic demand for more jobs right now, or that any marginal job losses simply cannot be borne right now. The administration would be willing to place a large composite burden (but marginally small on each group) in terms of health on the American people, especially children, in order to avoid this blow to job-seekers. Talk about being damned if you do, and damned if you don’t.
This might sound cruel, but it might just be the economic calculus that the country has to deal with right now in the current economic climate, and this will not change until America climbs out of the hole it is in.
In my opinion this issue again illustrates how one can not put a price on the value of a life. Let’s be real, we all know that the decisions being made now ,more so than ever, are all heavily influenced by the power of the dollar. Because it is so easy for to estimate the cost of implementing new regulations, decision-makers tend to forget that the regulations that they so quickly dismiss over price, are the regulations needed sustain the quality of health and life for our youth and elderly. It is very discouraging to see how we have and continue to overestimate our costs yet very little beneficial change can be seen. In a world where we are so desperate for jobs, are we not also desperate to have healthy individuals apply.
As people have already said, I find it very disappointing that jobs have taken priority over health. Coming from a health care perspective, preventive health care measures (treating the underlying problem), rather than reactive health care pays (treating a disease) off in huge amounts, whether it’s in the form of creating community exercise programs, healthy school lunches, or ,as in this case, regulating pollutants. Costs are lowered across the board from ER visits and medications, and that money saved could go back into the system to do things like creating different jobs.
The argument at hand – putting a price on human health – is indeed very difficult. The way I see it, healthy humans can contribute more to society, and not put a burden on the health care system; so in order to have healthy people to work those jobs, measures and regulations need to be in place to allow for it.
The decision is up for re-evaluation in two years. Hopefully by then, priorities will be in order.
Obama’s decision was an unfortunate political move, and one that I’ve read in multiple locations as being “legally indefensible.” Speaking of reading, I read an article today (http://goo.gl/EJrwJ) that pointed out friends of EPA Administrator LIsa Jackson said she briefly considered quitting in the wake of the decision to ignore her recommend ozone controls. She decided to stay on and continue fighting since she didn’t think anyone else would be willing to try and get as much done as her. So, while the whole situation sucks, at least it’s good to know that the person in charge of EPA remains committed to the fight, and is hopefully more energized to get things done.
A proper decision should base on concrete data and certainty. No government dares to draw its regulation just like a bet. HOWEVER, in my opinion these are all excuses and often used when people want to compromise. I really admire Professor Benear’s attitude towards this debate. Although the unemployment is a big problem to handle, citizens may not know exactly which is beneficial. We have to admit that most of us are shortsighted. People are looking for jobs so they pass this pressure to the government. Then President made his hard decision because “I have continued to underscore the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover”. Sounds like he’s balancing the nation’s ultimate good but he maybe is drove by the citizens’ unreasonable fear.
Indeed implementation may cause unemployment in short-term. But the historical statistics of the Clean Air Act proves we are very likely better-off in the future. The span of benefits can be reduced once the new regulation is issued. Then the trade-off will be clear and I believe the market itself is going to realize the “possibe benefits”.
Policy coherence should be taken into concideration. I agree with Angela on this point. I am sorry I don’t know much about the US policies. I think the general idea is recovering from the crisis. We all know someone’s greed is responsible in this crisis. In an industrial economics view, the US need infuse some fresh blood into the economics. In the atmosphere of global economics, America faces stronog competitors in many fields. The higher level of air condition brings oppotunity in the future world.
The world is running fast. If this country want to recover it will be in badly need of some innovations like the Internet in last century AS WELL AS HEALTHY CHILDREN.
I am not quite familiar with USA’s politics, but I do know that employment rate is one of the core measurement to evaluate the government, since theoretically, high and stable employment rate is the foundation of society harmony and development. Also most people will hold protests because of losing current jobs but few people will protest on losing better but potential future job opportunities. So I can understand Obama’s concerns of the decrease of existed jobs more than the increase of future jobs. However, as a president, he should consider the total welfare (net benefit) more than his temporary reputation.
I think it is necessary to do a national wide survey to find out what the total opportunity cost of asthma and other diseases or even death to help figure out the benefit we can get from protecting the environment.
I definitely agree with the jobs versus environment argument as rhetoric, especially when you consider health costs associated with exposure to a poor environment such as treatment for asthma attacks. I heard from many families who faced high medical costs from exposure to pollutants through my work with the EPA Environmental Justice Program in Region 7 in spreading awareness of environmental harms that cause health problems like asthma in low-income, minority communities. With job salary failing to keep up with health costs in these communities, I wonder how these issues can be better communicated to the greater public who fall for the jobs versus environment rhetoric every time.
When I was reading this blog, the first idea come into my mind is that economic analysis compares the benefit of more stringent regulation with the cost, but should the government just postpone the proposal because of the uncertainty of the cost and benefit, especially the regulation has relation to do with the human health, which can hardly be priced.
And also if the proposal was just postponed, it would not be a good idea from what we learned form the class, that the cost of reducing carbon emission would increase in the future and I think the in this case, it would be the same. In compliance with the more stringent regulation, the cost of reducing NOx and VOCs would increase in the future.
But then I tried to think about this from Obama government’s standpoint, there is uncertainty that maybe the original air quality standard is already stringent enough to make sure it post very little hazard on human health and the current standard is at a economic optimal level. So maybe make the regulation more stringent would not generate more benefit just in terms of human health and by doing so will risk bring job lost and other cost. The Obama government just do not want to take the risk, especially they are under the big pressure of not very good performance. Then considering all mentioned uncertainty in the blog, it makes sense the government step back.
While this do not mean that I agree that the government should postpone the proposal. The government should not only care about its performance now.
Like mentioned previously, the cost of reducing the emission of NOx and VOCs would increase in the future, and also as Lori mentioned in the log, historically the benefit would be underestimated, like the case in the Clean Air Act. And the regulation may have big influence on human health, even though the model is uncertain.