Bad Theory, Bad Legislation

[groovedaddy]

The House’s campaign to undercut environmental laws has now migrated to the Senate. Rand Paul, a Republican of Kentucky, is expected to offer a resolution this week to block a new federal regulation requiring cuts in soot- and smog-forming gases from power plants east of the Mississippi River. Joe Manchin III, a Democrat of West Virginia, and Dan Coats, an Indiana Republican, are then expected to try to delay all new rules governing power-plant pollution.

These are bad bills, and Senate leaders should stop them from going forward. Weakening clean-air rules would harm public health. And the fundamental premise, that environmental regulation destroys jobs, is simply wrong.

Earlier this year, the Economic Policy Institute conducted a study of a proposed rule that would require power plants to reduce emissions of mercury and other airborne toxics. It said that investment in new controls would actually create 92,000 jobs beyond those that might be lost through plant closings and higher electricity prices. Other studies of clean air laws have come to similar conclusions: These rules are job creators, not killers.

That hasn’t stopped Mitt Romney, a Republican presidential candidate, from accusing President Obama of killing jobs by “vastly expanding” Washington’s regulatory reach. Even moderate Republicans, like Senator Susan Collins of Maine, wrongly blame the “uncertainty and cost created by new federal regulations” for unemployment.

http://www.nytimes.com/2011/11/08/opinion/bad-theory-bad-legislation.html?nl=todaysheadlines&adxnnl=1&emc=tha211&adxnnlx=1320775319-01ZPKFI9wAoT6zRJOQ2ufQ

[Philosopher King]

1. It is my understanding that the new regulations are so tight that many

older facilities would be forced to cease operations. Typically, older facilities are protected from this sort of thing by "grandfather" clauses which provide exemptions for unachievable standards.

[Viking12]

2. True, but so what?

Yes, EPA regs will cost jobs: heavily subsidized, value-destroying jobs

Why is that so? Well, it's widely known by now, at least in economist circles, that the coal power industry grossly underpays for the damages it does. That's the unanimous conclusion of a flurry of new research that's been done on the question: see, e.g., the National Research Council (NRC), Harvard Medical School's Paul Epstein, or last week's bombshell from http://www.aeaweb.org/articles.php?doi=10.1257/aer.101.5.1649">Yale's William Nordhaus and colleagues, which found that coal-fired power plants do something like 5 cents of unpaid damages for every single kilowatt hour of power they produce. Economists call these costs "externalities," but really they amount to subsidies -- the public is paying these costs on the coal companies' behalf.

What's perhaps not as well understood is that the bulk of those damages comes from a relatively small number of extremely dirty plants, the ones that still burn high-sulfur coal or lack pollution-control equipment. The NRC report found that the 95th percentile of coal plants do more than 24 times the damage of the fifth percentile, on a per-kW basis. It is those plants, the clunkers that are just barely (or not even) economic to run, the ones grandfathered in under the Clean Air Act , that will be picked off by new regulations.

http://www.grist.org/coal/2011-10-03-epa-regs-will-cost-heavily-subsidized-value-destroying-jobs

[Nihil]

3. Good. (n/t)

[phantom power]

4. Until the number of coal fired plants starts decreasing instead of increasing, we're losing the war.