NCPA - National Center for Policy Analysis

EPA Regulation of Greenhouse Gas Emission Not Justified

March 25, 2011

A report from the Competitive Enterprise Institute report, "Clearing the Air on the EPA's False Regulatory Benefit-Cost Estimates and Its Anti-Carbon Agenda," by Garrett A. Vaughn, an independent economic consultant specializing in energy and the environment, says the Environmental Protection Agency (EPA) is relying on accounting tricks and gimmicks in its claims that clamping down on greenhouse gas emissions will produce more financial benefit than harm.

The EPA is poised to regulate greenhouse gas emissions under the Clean Air Act, in a vast and costly expanse of the agency's regulatory reach.  Vaughn takes apart the EPA's case for such action.  Among his specific criticisms:

  • The EPA is claiming inflated benefits for clean air regulations, totaling $1.3 trillion net benefit or nearly twice the amount of U.S. military spending.  However, EPA's report does not consider capital expenditures of manufacturers to meet regulatory deadlines or the basic law of demand that higher prices will reduce demand (thus reducing economic output).
  • The EPA claims that its past clean air enforcement has provided more than $30 of benefits for every dollar of cost, but unjustifiably implies future regulations will have such benefits, too.
  • The EPA's anticarbon campaign threatens to greatly undermine future U.S. economic growth and job creation, while doing virtually nothing to restrict global greenhouse gas emissions.  In fact, the EPA's campaign may actually stimulate global emissions by handing a competitive advantage to the more carbon-intensive economies of China, India and several other countries.

Source: Christine Hall, "EPA Case for Regulating Greenhouse Gas Emissions -- Torn Apart by New Study," Competitive Enterprise Institute, March 21, 2011.

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