NCPA - National Center for Policy Analysis

Pollution-Control Costs Are Added To The Price

February 22, 1999

In 1968, the White House reversed a decision by the Bureau of Labor Statistics and ordered that the costs of putting pollution- control equipment on cars could not be added to official inflation statistics. The administration then was desperate to keep the inflation figures as low as possible.

Last month, the Department of Labor reversed that decision. It began including the automotive pollution-control cost factor.

What had happened in the interim?

  • From 1968 through 1997, the White House edict reduced the rate of increase in the consumer price index by about 0.1 percentage point per year.
  • So consumer prices supposedly rose 3.3 percent less over the entire span.
  • New pollution-control requirements proposed by the Environmental Protection Agency in the past week could have an even greater impact in years ahead, experts warn.

Source: John M. Berry, "Pollution Control Changes Price Index Mix," Washington Post, February 20, 1999.


Browse more articles on Environment Issues