Environmental Economics

Environmental Protection: Is It Bad for the Economy? A Non-technical Summary of the Literature

Environmental regulation in the United States stands accused of causing a broad array of undesirable economic consequences. It is said that environmental regulation is too expensive, reduces economic growth, hurts international competitiveness, and causes widespread layoffs and plant closures. Sometimes, it is said, it even forces businesses to flee to more accommodating countries. The view that environmental regulation seriously harms the U.S. economy is so firmly established that it has become the centerpiece in the series of attempts over the last few years to roll back the very rules that have produced such dramatic improvements in environmental quality.

This article reviews the evidence that can be brought to bear to verify or refute these accusations. In all cases, these assertions do not stand up to a careful examination of the facts. First, we do indeed spend a considerable amount on environmental protection, but not as much as we do on health care and national defense – activities that may be of similar significance to many people. Second, we spend about the same amount in terms of GDP as do other nations at similar levels of development. Third, we gain enormous benefits from pollution control, so the issue is not really the cost of environmental protection, but the net benefits we receive. Finally, there is no evidence that U.S. environmental regulation causes large-scale plant closures and job losses, that it impairs our international competitiveness, or that it encourages companies to flee to nations with more lax environmental protection requirements.

  • Keywords

    1. Benefits Analysis
    2. Cost-Benefit and Cost Effectiveness Analysis
    3. Cost and Economic Impacts Analysis
    2. Cost-Benefit and Cost Effectiveness Analysis - Major Programs and Media
    2. Cost-Benefit and Cost Effectiveness Analysis - Surveys and Critiques
    3. Costs and Economic Impact Analysis - Economic Impacts
    3. Costs and Economic Impact Analysis - Competitiveness Effects
    3. Costs and Economic Impact Analysis - Surveys and Critiques
    Environmental Media:
    f. Multimedia
    Arnold, Frank S.
    EPA Project Officer/ Manager:
    Carlin, Alan
    Geographic Area:
    Study Purpose:
    Policy Evaluation
    Inventory Record #: EE-0422
  • Participating Organizations

    Research Organization:

    Environmental Law InstituteAddress: 1616 P Street NW
    City: Washington State: DC ZIP: 20036
    Phone: (202) 939-3900 Fax:
    Funding Organization:
    Office of Economy and Environment, Office of PolicyAddress: 401 M St. SW
    City: Washington State: DC ZIP:
    Phone: Fax:
  • Report Details
    Number of Pages:
    Grant/Contract #:
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    Date Linked: 05/28/2009