Sen. Inhofe gets serious about the cost of environmental regulation

Senator Jim Inhofe (R-OK) recently introduced a bill called the EPA Employment Impact Analysis act, which would force the Environmental Protection Agency to calculate the full economic impact of existing regulations before finalizing any major new rules.  The Clean Air Act already obliges the EPA to conduct economic impact analysis, but Sen. Inhofe and his thirty co-sponsors (all of them Republicans, as he noted in a conference call today) believe the agency routinely ignores this provision, conducting only narrow studies which greatly underestimate regulatory cost.

When announcing his legislation, Inhofe cited several examples in which the “whole economy” model used by the National Economic Research Associates consulting firm produced radically different estimates of job losses from the EPA’s far more optimistic models, which somehow managed to conclude that imposing expensive regulations would actually create jobs:

  • Utility MACT rule (77 Fed. Reg. 9301): EPA’s analysis of the Utility MACT rule estimated that implementation of the final rule would result in the creation of 46,000 temporary construction jobs and 8,000 net new permanent jobs. NERA’s whole economy analysis found that the rule would have a negative impact on the income of workers in an amount equivalent to 180,000 to 215,00 lost jobs in 2014, and 50,000 to 85,000 lost jobs each year thereafter.
  • Cross State Air Pollution rule (76 Fed. Reg. 48208): The EPA’s analysis of the Cross State Air Pollution rule estimated that implementation of the final rule would result in the creation of 700 jobs per year. NERA ‘s whole economy analysis found that the rule would result in the elimination of a total of 34,000 jobs from 2013 to 2037.
  • Boiler MACT rule (76 Fed. Reg. 15608): EPA’s analysis of the Boiler MACT rule estimated that implementation of the final rule would result in the creation of 2,200 jobs per year. NERA’s whole economy analysis found that the rule would result in the elimination of 28,000 jobs per year from 2013 to 2037.

In his conference call today, Inhofe said some of these regulations require a level of air quality that isn’t even possible using current technology, which is a formula for “putting people out of business,” not a stimulus for job creation.  Also, jobs “created” to comply with government regulations aren’t the kind of healthy employment growth associated with a blossoming economy.

He also discussed a recurring tactic of the Obama Administration: delaying the publication of final rules to push the economic damage out past the next election.  This was done with the Boiler MACT rules mentioned above, keeping some $63 billion in costs on ice until after the 2012 election.  It’s happened again with new standards for power plant greenhouse gas emissions, strategically delayed from September 2013 to January 2014, which pushes the 12-month window for implementation out past the November elections.

These regulations are fantastically expensive, but particularly in the case of measures designed to combat global warming, the benefits remain elusive.  Inhofe recalled a confrontation with then-EPA Administration Lisa Jackson, who he thought might have been ousted for being too honest when she told him domestic regulations would have minimal effect because the worst greenhouse gas problems were occurring outside the United States.

Skepticism would seem warranted when discussing regulations that cost three or four hundred billion dollars per year, based on a disintegrating scientific “consensus” that has thus far proved no better at predicting global climate changes than the local weatherman.  Inhofe is one of American government’s premier global warming critics – he’s written a book on the subject entitled “The Greatest Hoax: How the Global Warming Conspiracy Threatens Your Future.”

I asked what he thought of the latest United Nations report on the potential impact of climate change, and he said it’s basically the same set of dire warnings they always issue, no matter how actual climate data is piling up.  “You’ve got to remember, they rig their science,” he said of the Intergovernmental Panel on Climate Change, looking back to the revelations of such data-sculpting from the “Climategate” email scandal.  He suggested the United Nations is keenly interested in imposing global carbon taxes that would be difficult to escape from, no matter how skeptical the developed world becomes of global warming theories.  (Remember when skepticism was considered the soul of scientific inquiry, rather than unforgivable heresy?)

One would think the desire for transparency and broad-based economic projections from an agency as powerful as the EPA would be bipartisan.  However, Inhofe expected little support for his bill from across the aisle, since powerful interests – such as billionaire environmentalist donor Tom Steyer – would forbid the Democratic caucus from getting behind it.  With their energies concentrated on a last-ditch effort to stop the Keystone XL pipeline, these Democrats don’t want to get involved in a complex discussion of how the Environmental Protection Agency has not been entirely faithful to the requirements of the Clean Air Act.  Inhofe wondered if the growing discontent of farmers, saddled with such absurd regulations as a new initiative to tax cow flatulence, might provide enough pressure to bring Democrats on board with regulatory reform.

If that doesn’t do it, a Republican takeover of the Senate in 2014 would very likely put ranking Republican Jim Inhofe in charge of the Environment and Public Works Committee.  A number of interesting hearings would surely follow.