Following the toxic coal ash disaster of Christmas 2008, the U.S. Environmental Protection Agency has been developing long-neeeded rules for coal ash disposal, after decades of ignoring the dangers. The Utility Solid Waste Activities Group (USWAG) has claimed that strict regulation of ash disposal could lead to the loss of more than 300,000 jobs. An independent analysis by economist Frank Ackerman finds the industry claim “simply unbelievable,” because he discovered “arithmetic errors,” “wild extrapolation,” and a “groundless claim about potential losses due to the stigma of regulation.”
When Ackerman reconstructed the job-impact analysis of strict coal ash regulation that compares the employment costs of higher electricity prices to the employment benefits of increased spending on coal ash safety, he discovered that there would be a net increase of 28,000 jobs:
This report presents a new analysis of employment effects, based on an industry estimate of the costs of regulation that is much higher than the EPA’s cost calculation. The cost estimate I use was, in fact, developed for another industry group by the same consultants who claimed that more than 300,000 jobs would be lost.
Using that industry estimate for the cost of regulation and the well-known IMPLAN model of the U.S. economy, I show that the effect of the new spending required by strict regulation of coal ash, including expenditures for waste management, wastewater treatment, and construction and operation of facilities and equipment, combined with the impact of the resulting electricity rate increases on consumers, would be a net gain of 28,000 jobs.
Job impacts are not the only basis on which to judge new regulatory proposals. The debate should center on the magnitude and importance of the health and environmental benefits that would result, and the reasonableness of the costs of achieving those benefits. The fact that strict regulation of coal ash disposal would create a net increase of 28,000 jobs doesn’t, by itself, clinch the argument for such regulation. But it does free us of the unfounded fear of massive job loss, allowing us to evaluate the regulation on its merits.
In Congress, Rep. David McKinley (R-WV) has been pushing a bill to strip the EPA of the authority to regulate coal ash. The Recycling Coal Combustion Residuals Accessibility Act of 2011 (HR 1391) passed out of subcommittee in June but has not been taken up for consideration by the full House.
Ackerman is the Director of the Climate Economics Group at the Stockholm Environment Institute-United States at Tufts University.