Environmental Regulations Aren't Cheap; L. W, Reed

In 1991,the city commissioned a pioneer ing study of federal and state environmental requirements as they impinge upon city finances. Nearly 20 percent of the total city budget, the study predicted, would have to be spent by 1995 to comply-a sum well in excess of $100 million. "We will spend millions cleaning up an already clean water system, and it's ques tionable whether we would improve the health" of city residents, the mayor's chief of staff said recently. At least Columbus won't have to spend any more to test water for a pesticide that was once used exclusively on pineapples in Hawaii and has been banned for nearly two decades. The federal Environmental Protec tion Agency (EPA) was finally convinced last year that cities shouldn't have to do that any more. Businesses and governments all across America are waking up to a shocking fact of life: environmental regulations are a super growth industry, and one that threatens to swallow up their resources and cripple their ability to survive in an increasingly compet itive, penny-pinching world. It's enough for many to recall what the Founders accused Dr. Reed, economist and author, is President of The Mackinac Center for Public Policy, a free market research and educational organization headquartered in Midland, Michigan.

by Lawrence W. Reed King George of in 1776: "He has erected a multitude of new offices, and sent hither swarms of officers, to harass our people, and eat out their substance." The principal culprit in all this, America's geyser of environmental rules, is the EPA. With lots of money and plenty of staff, the agency churns out regulations and mandates as if cost is no object and conjecture is sufficientevidence of likelybenefit. It boasts a staff that exceeds 18,000and an operating budget approaching $5 billion. Forbes mag azine calculates that the EPA's staff has quadrupled since 1970 and its inflation adjusted spending has gone up ten times. In 1990, the EPA estimated that compli ance with its regulations was costing Amer icans approximately $115 billion per year almost $500 for every man, woman, and child. That's without a doubt the understate ment of the decade. Municipalities, notes Science magazine Deputy Editor Philip H.

Abelson, have reported instances in which real costs exceeded EPA estimates by a factor of 20 or more. Philadelphia mayor Ed Rendell has cited many instances of EPA's grossly underes timated costs to his city. The agency, for example, figured that preparing storm water permits would cost the city only $76,681, while the actual number turned out to be $916,950. Experts in both government and industry are raising questions about the worth of all this spending for regulatory compliance. The federal Officeof Management and Bud668 get stated in 1990that regulation of atrazine in drinking water as carried out by EPA under the Safe Drinking Water Act would cost $93 billionfor every life prolonged. The Dallas-based National Center for Policy Analysis calculates that an EPA rule on wood preservatives costs an astounding $5.7 trillion for every life presumed to have been saved by it. Statistical models developed in California have shown that one fatality is induced every time regulations reduce Gross Na tional Product by between $5 millionand $12 million. The expenses of compliance with EPA rules, those models suggest, already are responsible for inducing over 30,000 deaths per year. When the Clean Air Amendments are fully implemented, you can add another 5,000 to that.

"I've never seen a single rule where we weren't paying at least $100 million per life," Yale Law School Professor and recent EPA legal counsel E. Donald Elliott told Forbes. Studies have confirmed that the death rates for high school football are anywhere from 100 to 2,000 times higher than death from asbestos in school buildings. Children are from 2,700to 54,000times more likely to drown than to die from asbestos. Yet, under orders from the EPA, communities have spent hundreds of millions to remove asbes tos from schools. There are other ways to assess the impact of the problem. The American Council for Capital Formation says that by the year 2005, environmental regulations as a whole will have reduced the U.S. capital stock by 4.3 percent and increased the cost of capital by 5.5 percent. CONSAD Research Corpo ration, a Pittsburgh-based consulting firm, projects that at least 200,OOOjobswillbe lost due to the Clean Air Act amendments of 1990 alone.

Adding salt to the wounds, EPA Admin istrator Carol Browner boasted in Novem ber 1993 that her agency had issued 25 new 669 air regulations in the first 10 months of the Clinton administration. On and on it goes. The numbers add up as our standard of living and our liberties erode. The environmental juggernaut just rolls on oblivious to the damage it leaves in its wake. The EPA, the Congress, and many state agencies are presiding over the greatest expansion of the intrusiveness of government Americans have ever seen, all in the name of cleaning up the country and often with little or no good to show for it. This is real money that governments and businesses are spending. These are real lives that regulations are costing. Neither money nor lives are inexhaustible resources. Nor are the freedoms we sacrifice each time we allow government to trample property rights in the name of environmental regulation.

All this zealous· "regulate for the sake of regulating" activity is occurring, by the way, at a time when scientific evidence overwhelmingly suggests that our environ ment today is cleaner than it was 50 years ago, and safer for humans than at any time in history. That fact is documented thor oughly in a new book published under the auspices of the Chicago-based Heartland Institute, entitled, Eco-Sanity: A Common Sense Guide to Environmentalism. Authors Joseph L. Bast, Peter J. Hill, and Richard C. Rue assemble unassailable facts and figures and the most compelling argu mentation to make this point: government has been a poor environmental steward and a counterproductive regulator. Genuine en vironmentalism that keeps the environment clean calls for respecting property rights and utilizing marketplace incentives. It's a case that cries out for public attention, for it constitutes the only viable alternative strat egy to the current regulatory Inquisition.

Those of us who believe in both freedom and a clean environment must make the case that these two things are not at all incom patible or we may end up losing both. D THEFREEMAN IDEASON LIBERTY The Government as Robin Hood by E. C. Pasour, Jr. R obin Hood robbed the rich to give to the poor. Although most people are critical of Robin Hood's actions, relatively few question the legitimacy of governmental coercion to redistribute income. The typical justification for government welfare pro grams hinges on a highly dubious assump- . tion. It is assumed, at least implicitly, that government has both the motivation and the ability to aid the poor. As shown below, there are a number of reasons to question this assertion. 1 Collectivization of charity is objectionable on ethical grounds and there is mounting evidence that it is harmful to the long-run interests of the poor. Information and incentive problems that complicate both the administration and analysis of government poverty programs are first discussed. These problems are partly responsible for the fact that the pro grams have done little to improve the lot of the poor in the United States. Ethical issues are then explored in addressing the question of whether government should be involved in poverty relief.