Heritages David Kreutzer argues dirty air creates jobs

In a new blog post, the Koch-fueled Heritage Foundation continues to defend the fossil fuel industry at the expense of American jobs. Heritage attacked Environmental Protection Agency administrator Lisa Jackson for testifying that stronger limits on dangerous air pollution could create over a million jobs. Her testimony was based on a study by the University of Massachusetts Political Economy Research Institute (PERI), which found that electric utilities would create 300,000 jobs (or 1.5 million job-years over five years) as they clean up aging, polluting power plants.

Brad Johnson has the story.

The PERI report used figures from a study by Charles River Associates for utility giant Exelon, which found that “EPA air regulations can be implemented without adversely impacting electric system reliability.” The proposed transport rule would save up to 36,000 lives a year, worth hundreds of billions of dollars in health and welfare. Heritage’s David Kreutzer, on the other hand, argues the higher health standards are bad because “these regulations increase energy costs“:

On Wednesday, Environmental Protection Agency (EPA) head Lisa Jackson quoted this study to support her assertions the EPA regulations are net job creators. Under this logic, all regulations that have compliance costs create jobs. The PERI study claims that EPA regulations will add nearly 1.5 million jobs over the next five years (Note: They have completely confused a job and a job-year, which multiplies the errors in their results.) However, because these regulations increase energy costs, they cut consumers’ income while raising manufacturers’ costs of production. The net effect is both job and income losses.

Kreutzer, a “global cooling” fantasist, also fears renewable electricity standards and carbon pollution markets.

Kreutzer’s argument boils down to the idea that a perfectly efficient economy will suffer if businesses “” like electric utilities “” are forced by burdensome regulations to make needless expenditures, taking money away from other sectors. Although that may be an economics-101 level understanding of the world, it’s certainly not sufficient to come anywhere close to reality. The Bush deregulation economy collapsed in 2008, creating not just massive unemployment but also a sharp decline in capital investment. Supported by the investments of the recovery act and by low interest rates, American corporations have rebuilt cash supplies, especially the banks bailed out by the Bush administration.

The output gap “” essentially the difference between Kreutzer’s idealized full-tilt economy and the actual, high-unemployment, low-investment economy we have now “” is huge. Incentives for companies to make capital investments are precisely what’s needed to restore economic health. And higher standards that get key industries like electric utilities to upgrade their power plants will do just that, as PERI study author James Heintz explains:

If the economy were operating at full-tilt, with low rates of unemployment and no excess capacity, there could be something to this argument.

However, the current reality is significantly different. Unemployment remains at historically high levels and one glance at the data on the financial sector, such as that provided in the flow of funds accounts, shows that lending has not recovered. Mobilizing idle resources through new investments does create jobs, since the resources were not productively employed in the first place.

Moreover, private investment is not just about spending in the economy. Investments to update and modernize the capital stock of the electricity sector generates real supply-side benefits in terms of greater productivity and improved efficiency. Such improvements lower the costs of production and support future growth.

Instead of ‘crowding out’ spending in other parts of the economy, such productivity-improving investments actually generate income. Given these considerations, there is no reason to believe the assertion that spending on capital improvements in the electricity sector will reduce spending one-for-one elsewhere in the economy.

History refutes Kreutzer as well, Heintz notes: “Indeed, since the 1990 amendments to the Clean Air Act were enacted, price trends from the U.S. Energy Information Administration show that the price of electricity, adjusted for average inflation in the economy, fell steadily as the electricity sector made sizeable investments in new capacity and pollution control technologies.”

Furthermore, if Kreutzer is going to worry about second-order effects of policies that create jobs, then we should also factor in the second-order effects of all the pollution if the standards weren’t enforced, and all the lost job-years from the lung diseases and death caused by more smog and soot in the air.

“A constructive engagement over the impact of regulations to reduce harmful emissions is welcome,” Heintz writes. “However, misrepresentation of the findings of this report, wherever they come from, only serve to undermine serious consideration of the issues.”

— Brad Johnson, in a WonkRoom cross-post.

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18 Responses to Heritages David Kreutzer argues dirty air creates jobs

  1. Matt says:

    Of course dirty air creates jobs…. for specialists in asthma and other respiratory illnesses.

  2. A Siegel says:

    Isn’t Kreutzer correct that, when it comes to the Health Care Industry, taking action to reduce pollution would hurt job growth because it would lessen cancers, asthma, and other illnesses caused due to fossil-fuel pollution?

    And, to give another example, forcing Pepco to meet some form of reasonable standards of service would also hurt employment. After all, thinking of all those generator and fuel sales people who would have fewer business opportunities …

  3. Scrooge says:

    I see a lot of the same problems here that we see in most issues. Most people understand economics 101, we live that everyday. As soon as you try to advance above that level it becomes to complex for any tea party member and at least half of the republicans. This is where you can see where greed coupled with some intelligence is a dangerous thing. Kochs have the capability to put all the tea party politicians in his pocket, possibly a couple of supreme court justices also. To make it all come together he had to use the talking heads to rally the uneducated republican base. Wasn’t it cheney a few years back who said we want people to be educated but not to educated because then they vote democrat.

  4. Jeffrey Davis says:

    As do drug dealing, prostitution, and TV.

  5. Sime says:

    Fox News, Glenn Beck, Kreutzer and Koch, oh please that’s a convention for the “Dark Side Of The Force” one should learn to smell the putrid stench, that’s a one way road to stupidity.

    Fox is the US equivalent of the “Reichsministerium für Volksaufklärung und Propaganda” simply put these individuals spout lies and BS and get paid to do so, and it may be that some of the individuals involved don’t even realize that, that is what they are doing, it really is that insidious a technique.

    It is not new, a guy in Europe called Adolf did it (remember him), the technique is called “The Big Lie” it’s essence lies in the proven method that…

    “If you tell a lie that’s big enough, and you tell it often enough, people will believe you are telling the truth, even when what you are saying is total crap.”

    Fox do exactly that day in, day out, day in, day out, day in, day out…

    The silver bullet


  6. Prokaryotes says:

    Bill O’Reilly Interrupts President Obama 48 Times

  7. Mimikatz says:

    I was going to make the same points re: the health care industry. Alternatively, people sometimes argue that regulating tobacco is bad because smokers die younger and it saves money in the long run on health care. And if we have enough people dying prematurely of respiratory diseases and other climate-related maladies, doesn’t that help the solvency of Social Security?

    All of which points up the need for re-framing these issues. The most effective counter to the “clean air will cost your job!” rhetoric is simply “Dirty air will cost you your children!”

    Cleaning up the air and mitigating climate change will improve and even save lives, especially prolonging the lives of today’s children. Relate chronic illness to dirty air, especially asthma in children and adults. A warming planet will also have more heat waves and this will take the lives of the elderly as well as children. Happened in 2003 in Europe, in 2007 here and in 2010 in Russia.

    The only thing that really trumps jobs is children’s health and children’s future. Not “the future” but “your children’s and grandchildren’s future.”

  8. PurpleOzone says:

    Matt #1 beat me to it. Jobs for doctors.

  9. Prokaryotes

    I would consider that interrupting the POTUS that many times in such a short period as being nothing short of terrorism. Certainly isn’t patriotic but then none of the Fox pundits can have any claim to true patriotism, they are true gutter press however, no manners and full of their own self importance amongst other stuff.

  10. Joan Savage says:

    There was something particularly galling about Kreutzer’s claim of a net economic loss. His appeal to people worried about their energy bills was was misleading.

    Here’s a counter point example:

    In 1996, the total economic impact of asthma in school-age children was $1993.6 million ($791 per child with asthma).

    So, on a household basis in 1996, a utility bill would have had to drop by at least $791 per year, to just equal the cost of medical care for one child affected by poor air quality.

    Maybe someone can come up with the cost per customer per year of putting scrubbers on smokestacks, but I seriously doubt that it was anywhere as high as $791 per year in 1996.

    I am sure that most parents, given a choice between paying for care for a sick child or paying for cleaner air, would pick the cleaner air, anyway.

  11. Wes Rolley says:

    Well, Kreutzer has not done his homework. But then, I often get the feeling that no once cares about the facts. In other posts at other times, I have referenced a study from California State University – Fullerton that proves Dirty Air Costs California Economy $28 Billion Annually.

    When they we ever learn?

  12. Chris Winter says:

    A Siegel wrote (#2): “Isn’t Kreutzer correct that, when it comes to the Health Care Industry, taking action to reduce pollution would hurt job growth because it would lessen cancers, asthma, and other illnesses caused due to fossil-fuel pollution?”

    It’s possible for the health care industry, though I tend to doubt it because we are very far from a shortage of disease and injury cases.

    But you miss the really important question, which is: Does a person earn more and consume more when healthy than when sick? I believe the self-evident answer is yes. The healthy person almost certainly holds down a job and has disposable income. That gets spent on rent or mortgage payments, perhaps car payments, insurance, fuel and maintenance, utilities and appliances for the home, and the panoply of products that make up our consumer products industries. The person chronically sick, as with asthma, may support some health-care jobs but probably spends comparatively little on other industries.

    In short, the healthier a populace is, the better for job growth.

    “And, to give another example, forcing Pepco to meet some form of reasonable standards of service would also hurt employment. After all, thinking of all those generator and fuel sales people who would have fewer business opportunities …”

    It’s true that imposing higher costs of energy would result in some job loss in energy industries. However, once again you have to balance these losses against the gains that flow from a healthier populace. I think a cleaner world is a net win for jobs.

  13. How many lives per job? Anybody calculate that?
    Or years of life lost per year of job duration.
    That’d be a good metric to have wouldn’t it?

  14. Also… shouldn’t the military industrial complex be looking to retool for WW III? That being the war against carbon.

  15. Zetetic says:

    Beam Me Up Scotty said:

    Also… shouldn’t the military industrial complex be looking to retool for WW III? That being the war against carbon.

    I think that they are too busy using foreign non-christains as target practice and getting ready to fight for resources. They’ve got to think about those quarterly profit statements, let someone else worry about the future. [/sarc]

  16. Leif says:

    “I think a cleaner world is a net win for jobs.” Statement by Chris Winter.

    From a personal point of view. I would much prefer to be healthy and providing for my family than sick and a drain on both family and society. The GOP complains about non workers and yet does all it can to enhance the rolls of the sick thru environmental degradation and to be on the safe side keep them sick with poor health care options. Obviously 1+1=<1 is a good thing and is the new math that I am rusty on.

  17. Mulga Mumblebrain says:

    This is where the sheer ideological approach of the Right becomes apparent. Spending on energy efficiency will not only employ idle labour, but in the medium and long-term lead to greater efficiency, hence lower prices and fewer ‘externalities’ like lung disease and pollution. But the Right would rather fight another of their interminable kulturkampfs. They even deny themselves the chance to share in the profits to be made from energy efficiency. So we have fanatic ideologues, who not only refute science, the scientific method, observations, computer modeling and peer review in the observances of their pre-Enlightenment cult, but they also abjure profit opportunities. They are so bloody- and single-minded that the victory in the ‘battle of ideas’ (laughable, as they have none, just assorted bigotries, immune to reason or investigation)and the assertion of their raw political and economic power is everything. Either that, or they do, for reasons that would defy any pathopsychologist (but not, perhaps, a student of ponerology)wish to cause as much suffering and destruction to humanity as possible, preferably after they are dead. I think that it is down that dark and twisted path that we will find the true meaning and significance of denialism in all its hideousness.

  18. David B. Benson says:

    Dirty air certainly does create jobs. For
    assisted living attendants
    ambulance drivers
    gravestone manufacturers
    grave diggers
    cemetary caretakers

    Bring it on!