Vail Daily column: Regulation is not a dirty word
January 27, 2017
In a desire to generate greater economic growth, President Trump has begun a crusade to roll back environmental regulations. By nominating Scott Pruitt to be administrator of the Environmental Protection Agency, Trump has signaled that the EPA will be re-examining its many regulations that protect the quality of our air, water and land.
Just this past week, Trump himself has claimed that our environmental regulations "are out of control." So, are regulations good or bad?
The EPA was established by President Richard Nixon in 1970. Its purpose is to protect human health and the environment by writing and enforcing regulations based on laws passed by Congress. The EPA is not a Cabinet department, but its administrator is normally given cabinet rank.
There may well be some EPA-proposed regulations that deserve scrutiny that results in a determination that they do not deserve our support. But the current temperament in Washington appears to encourage a “Wild West” approach to environmental regulation, damning appropriate regulations in favor of a very small increase in economic growth.
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Many businesses generate costs in the production of their products that are born by other entities — these costs are called negative externalities. One example is a manufacturing plant that disposes chemical wastes into a nearby river, without substantial cost to the business, that kills fish downstream that otherwise would be caught and sold by fishermen for their livelihood.
The fishermen, in this case, are absorbing the cost of pollution generated by the manufacturing plant. Rather than let the business pollute the river cost-free, the EPA was formed to enforce laws to force the business to clean up its effluent before any discharge into the river. This "cost" of cleaning up the pollution transfers the cost of the pollution from the fishermen who were bearing it back to the business that was creating it.
Negative externalities are quite prevalent, as our profit-based businesses are not incentivized to absorb these types of costs on their own — just the opposite, in fact. Businesses have the incentive to eliminate costs, and polluting a river, free of charge, reduces their costs. Prior to the EPA, pollutants were generated by businesses that deleteriously affected our water, air and land — which resulted in threats to human health.
EPA Success stories
Regulations were put in place to protect our environment, and to force businesses to absorb the negative externalities for which they were responsible. These regulations were not enacted willy-nilly by Congress. The history of the EPA is replete with success stories of cleaning up large land areas that had been used as dumps (visit Anaconda, Montana, for an example of this), re-establishing pristine conditions of our rivers that had been terribly polluted with chemical wastes (PCBs generated by the General Electric Co. were cleaned up in the Hudson River), and reducing harmful emissions from factories and automobiles that have resulted in much cleaner air (compare the air in any major U.S. city to that of Beijing, for example).
It's doubtful today th==at any sane politician would take a position that we should allow companies to freely dump mining wastes onto the pristine landscapes of Montana or allow a company to release a harmful chemical like PCBs directly into the Hudson River.
The regulations that are being considered today are typically addressing less egregious — or at least less obvious — forms of pollution. The negative externalities may be less costly than the "fix" to clean them up, at least on the surface.
Questions about costs
Nonetheless, a company is forcing the cost that it should bear onto others — usually the American public. Or, in some cases, the cost of mitigating the negative externality involved is so high as to change the economics of the product involved, making it uneconomical to produce.
For example, capturing the CO2 involved in a coal-generating electric plant — as proposed by the Clean Power Plan — is estimated to raise the cost of the electricity produced by a coal power plant by 20 percent or so. The question often becomes, do we want to allow a company to force this cost onto us in order to gain the benefits from its continued operation?
'Wild West' approach
There may well be some EPA-proposed regulations that deserve scrutiny that results in a determination that they do not deserve our support. But the current temperament in Washington appears to encourage a "Wild West" approach to environmental regulation, damning appropriate regulations in favor of a very small increase in economic growth. This is short-sighted and is a trade-off that we should not support.
Steve Coyer lives in Avon.
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