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Economist: Clean Air Rules Don’t Slow Economy by Raising the Power Costs

April 6, 2012

CHARLESTON, W. Va. – West Virginia's critics of the Environmental Protection Agency (EPA) charge that its new rules to force power plants to cut air pollution will cause electricity rates to rise, thereby slowing the economy. But economist Josh Bivens, with the Economic Policy Institute, disagrees.

Bivens says the jobs created by new investments in pollution reduction will more than offset the losses. His research indicates the argument that "regulations kill jobs" is often a myth, which he says is the case with the clean air rules.

"The reason why electricity becomes more expensive is because the utilities have to hire people. The boost from the extra jobs created by the investments, I estimate, outweighs the negatives."

Bivens' findings are detailed in a new report, Going Green Won't Kill Jobs During Hard Times, published in New Scientist magazine.

According to Bivens, some argue that government-mandated investments could pull resources from other productive places in the economy – although he notes that is only the case if the economy is growing quickly. He points out that the problem with this downturn, like all slow periods, is that private money is sitting idle. In effect, he says, the EPA is forcing some of that idle money to become productive again.

"Financial capital is not scarce. Corporate liquid savings are at all-time highs; we've got historically low interest rates. There's just no evidence that these investments are going to necessarily crowd out some other private investment."

Bivens' analysis does not include the health benefits of breathing cleaner air, although he says those will have a significant impact, as well.

"By those measures, this seems like a really big winner, mostly driven by the benefits to health and quality of life identified by EPA."

Gov. Earl Ray Tomblin, Sen. Joe Manchin and all three West Virginia members of Congress have publicly attacked the EPA's Clean Air Act rules.

Dan Heyman, Public News Service - WV