Obama’s New EPA Regulations Means Higher Electricity Costs? Fewer Jobs? Boosting Health?

Ever since President Barack Obama pushed the new Environmental Protection Agency regulations on carbon emissions, there have been multiple analytical reports on what it would do, as a whole, for the United States. Some reports on the regulations of carbon emissions have been very positive, while others negative. But which ones are true? Is the side pro-regulations being honest compared to the side anti-regulations, or vice versa?

USA Today reports Obama says the EPA regulations on carbon emissions will boost health and the economy. It was announced to the public last Saturday, in which Obama stated it would limit power plant emissions, reduce air pollution, improve health, and spur a clean energy economy that can be “an engine of growth.” The EPA’s regulations on carbon emissions is a major part of Obama’s plan to fight climate change, and will require the states to reduce heat-trapping carbon emissions from thousands of U.S. power plants, especially coal-fired facilities.

On the other side, the Chamber of Commerce of the United States of America lobbying group contends that the EPA regulations on carbon emissions will mean higher electricity costs and fewer jobs. According to the blog post, this includes the cost as many as 442,000 jobs in 2022 and will put 224,000 Americans out of work on average, annually. It will also cost $51 billion in GDP loss annually and lower disposable household income by $586 billion. Finally, it will increase electricity costs by more than $289 billion.

The Chamber of Commerce report comes from its own Institute for 21st Century Energy and is said to be “based on an existing plan developed by the Natural Resources Defense Council (NRDC) and the Obama administration’s previously-announced goal of reducing greenhouse gas emissions to 42% of 2005 levels by 2030”.

Despite the report coming from the lobbying group, Obama said the critics are wrong:

“They warned that doing something about the smog choking our cities, and acid rain poisoning our lakes, would kill business. It didn’t. Our air got cleaner, acid rain was cut dramatically, and our economy kept growing.”

So which side is right? Well with basic knowledge about green technology and environmentalism, along with knowledge of both macro and micro economics, both articles are actually right if you take them on a literal level. Obama is correct when he says that cutting back carbon emissions will boost health because pollution does have an adverse effect on all living organisms, not just people. That has been proven through numerous scientific experiments ranging back to the 80s. Second, Obama is right when reducing carbon emissions will boost the economy, but only in the initial run. There are plenty of write-offs and credits for “going green” that people and businesses can take advantage of.

With the exception of health boosting, Obama’s statement on the economy is not long-lasting, which is what the US Chamber of Commerce sees. When it comes to items that produce carbon emissions, the only way to reduce the carbon emissions is to reduce the production, or in the case of some plants, burn less coal. Historically, whenever a business has less of its product, the price goes up. So who has to pay for the costs? The people who use electricity right? Also, a business – just to stay afloat – will need to cut costs. What is the #1 cost that can be cut? If its a business on transaction, workers are the #1 cost, and more so if the product has been reduced.

Also, the US Chamber of Commerce is recognized for supporting businesses, so of course they will go against anything that will hurt businesses. If Obama wants to prove the US Chamber of Commerce wrong and keep his carbon emissions regulations intact, he’ll need to add more write-offs or benefits in association with reduced carbon emissions along with the reduced workload.

So in conclusion, both Obama and the US Chamber of Commerce are right on their view on the EPA’s regulations on carbon emissions. Short-term, Obama is right. Long term, the US Chamber of Commerce is right. Most people in the United States may tend to go with Obama though, because most of us have an “instant gratification” mindset. But that is diving into sociology. What do you all think about the EPA’s regulations on carbon emissions? Is Obama right or the US Chamber of Commerce?

[Images via Carbon Emissions on US Chamber of Commerce and Bing]