NCPA - National Center for Policy Analysis

Environmental Apocalypse Now?

January 16, 2003

Have environmentalists' predictions of economic decline become a self-fulfilling catastrophe? That's the question economist Craig S. Marxsen pondered while reviewing several academic studies on the economic impact of environmental regulations.

For example, based on a study that concluded environmental regulations reduced U.S. manufacturing productivity by 11.4 percent below what it could have been by 1986 Marxsen estimates:

  • Regulations reduced U.S. output 22.35 percent below what it otherwise would have been in 1990.
  • Real gross domestic product would have been 20.65 percent higher in 1990, other things being equal.
  • Productivity stagnated from 1973 to 1995, but this was obscured by an influx of foreign capital and women into the workplace.

What's the bottom line? According to Marxsen, "ecocatastrophism [his term for the environmental-doom viewpoint] dangerously weakens economic performance in several ways and therefore might bring about a persistently declining global standard of living that would create a debacle not unlike the very one of the catastrophists fear."

Source: Craig S. Marxsen "Prophecy de Novo: The Nearly Self-Fulfilling Doomsday Forecast," Independent Review, Winter 2003, Independent Institute.


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