Clean Air or Jobs: What a Choice

As an advocate for urban causes, I am concerned that the Clinton administration’s extreme environmental stance could wind up choking off dollars earmarked for cities and community development programs.

The administration is so eager to please vocal environmental constituencies that it is on the verge of destroying a model for the new economic development that the multibillion-dollar national corporate fund proposes to achieve through the landmark Community Reinvestment Act.

The very programs that banks, insurance companies and other national financial institutions have established to revitalize cities and curb urban flight could be abandoned if the Environmental Protection Agency imposes punitive air pollution regulations on industries and small businesses.

At issue are the EPA’s new and more stringent air quality standards for nitrogen oxides, ground-level ozone and fine particles of soot. The EPA has ignored the potential unintended consequences of its actions on people in the inner cities. The agency’s implementation of the standards is being done with reckless dispatch, and that’s deeply troublesome.

The EPA is pitting clean air against jobs and physical health against economic well-being in depressed neighborhoods. Communities outside the poverty zones have cleaner air and ongoing economic development; inner cities need the same.

The EPA’s proposed regulations will undoubtedly impose huge costs. Small businesses would feel the full weight of the new regulations, as many restaurants, bakeries, dry cleaners and auto body shops are required to cut emissions. The U.S. Small Business Administration concludes that the new standards would constitute the most expensive regulations faced by small business in more than a decade. Small businesses are the engines that drive urban economies. Clearly, any new regulatory costs on them could drive away new investment. Apply new regulations and financial institutions will surely lose interest in the inner cities.

The EPA has estimated that the annual cost of the new pollution control regulations would run from $8.2 billion to $10.2 billion per year. However, the most responsible economic estimates of the cost of the new standards range from $40 billion to $60 billion per year, all of which must be paid in one way or another by consumers or taxpayers. This is in addition to current pollution control costs, which are estimated at more than $200 billion per year.

Clearly, any more environmental regulations are likely to be lethal. Yet the Clinton administration is already looking for ways to implement the global warming agreement, which was approved in Kyoto, Japan, last December. That agreement obliges the United States to reduce its emissions of greenhouse gases by one-third from what they otherwise would be in just over 10 years’ time. A study by economist Mary H. Novak of Wharton Econometric Forecasting Associates estimates that the cost to the U. S. economy of achieving the Kyoto target would reach $300 billion per year; that’s almost as much as we spend on Social Security.

What is especially unsettling about all of this is that many scientists disagree with the assumptions the EPA has made about global warming and more stringent air quality standards. For example, the EPA’s own science advisors have said that there is no “bright line” that says one standard for ozone is better than any other. And, with regard to greenhouse emissions reduction, the administration has chosen an excessively difficult goal and is committing the United States to taking the hardest route to achieve it while simultaneously exempting developing nations from it.

It is one thing to alter policy in the name of environmental protection. It is something else entirely for the administration to avoid giving Congress a say in the matter by having the EPA adopt rules that will accomplish its environmental objectives. This, Congress has the power to stop, and it should.