The Environmental Protection Agency released new regulations on mercury emissions this week. Predictably, the right-wing has been screaming about the extent to which these regulations will kill jobs. Many observers have already figured out that the right-wing has decided to just call anything it does not like job-killing whether it is true or not. But in this case, the job-killing rhetoric has reached an absurd level.
According to the Environmental Protection Agency, the costs of this new regulation will be $10 billion per year while the savings from this new regulation — calculated by the lost wages of some of those harmed by the mercury pollution being curtailed — will be $90 billion per year. This estimate however might be very low.
Even if we only use the EPA calculation of $90 billion per year of losses, there is no way that this could be a “job-killer.” The right-wing argument for how this is a job-killer is on its face absurd and totally ignorant of even the most basic economics. The story goes like this: by forcing the polluters to stop, you will increase the costs of energy, which will decrease economic activity by an amount equal to those increased costs.
While it is true that increasing aggregate energy costs by $10 billion will negatively impact overall production, that is more than offset by the $90 billion in extra production that comes from saving the mental capacities and lives of those who are currently hurt by the mercury. We lose $10 billion, but we gain $90 billion. Not only will this not “kill jobs,” but it will actually create jobs.
More than that, economically speaking, this regulation functions as a kind of Pigovian tax. I know this is pretty basic analysis, but somehow the right-wing does not seem to get it (or more likely are intentionally misleading people here). When a firm like a power plant is able to externalize costs, that leads to inefficiencies. In this case, the cost of the mercury pollution is externalized on the victims of the pollution. The new regulation forces the firm to internalize these costs, which will ultimately have the effect of making the cost of energy reflect its true price. If people use less energy at its true cost, then so be it.
Although I like to be charitable and assume that the right-wing is not being malicious, more and more it is hard to take that approach. There is simply no way that this could kill jobs, and it makes perfect economic sense to implement it. In addition to that economic nonsense, the increasingly libertarian nature of the right-wing in the US should lead them to be totally outraged that any mercury pollution is making its way into the bodies of non-consenting people. It is after all a violation of an individual’s “self-ownership” to inject poisons into their body without asking them.