It is reported that Obama is being praised by Republicans for deciding not to toughen the federal smog regulations because the extra cost to businesses would hurt jobs in a weak economy. Now these reports must be false, because we all know that Republicans automatically oppose everything Obama does (okay, except for when Obama kills Osama). But Obama is taking significant criticism from the left for caving to Republicans, big business, polluters, and other bad guys. Apparently this is so bad that MoveOn.org members are wondering “how they can ever work for President Obama’s re-election.” I’m not going to make vacuous conjectures about whether or not Obama’s move will win him more votes from independents or fewer votes from the left, because vacuous conjecturing irritates me, but I will offer some background information for the uninformed reader and try to summarize the different political and economic arguments at play.
It all starts with the Clean Air Act, “passed in 1963 and significantly amended in 1970, 1977 and 1990.” Among other things, it requires the EPA to set new standards for pollutants every five years. One of those pollutants is “ground-level ozone,” or smog, which is said to be caused by things like power plants and vehicle exhaust. Last review time was 2008. At that time the ozone level was down to 84 parts per billion, but EPA scientists said it needed to go down to 60-70 ppb to properly protect Americans from negative health effects. Stephen Johnson, EPA head under the Bush Administration, didn’t quite agree, and set it at 75 ppb. Next review time isn’t until 2013, but since the last guy apparently didn’t set the recommended amount for good health, Obama’s EPA, led by Lisa Jackson, has been thinking about changing things ahead of time to correct the previous error. But apparently the latest unemployment numbers were too disturbing, because literally a few hours after they were announced we learned that any update to the mandate had been taken off the table until 2013. [Cue praise and dismay from appropriate parties.]
Before I go on, I want you to try to appreciate the scale involved here. An ozone level of seventy-five parts per billion means that for every billion particles in the air in a particular area, seventy-five of them are ozone particles. This is astonishingly small. Scientists who worry about the world’s carbon dioxide levels talk about levels of 350 parts per million and what might happen if the world reaches 450 or 500. That means we’re discussing 350,000 or 450,000 parts per billion of carbon dioxide at the same time we’re debating whether 75 or 70 or 60 parts of ozone is acceptable. If the land mass of the United States was a person, and all the people living on it were air particles, these scientists are saying the United States might develop breathing problems if only a couple dozen of all of its inhabitants were ozone particles, but would be OK if three or four of those two dozen ozone particles weren’t there. These are remarkable claims for such small numbers and such small changes in such small numbers.
But hey, I’m not the scientist, and they are, so I have to trust them, right? All this ground-level ozone is said to cause “inflamed respiratory tract, worsened cardiovascular disease, asthma, even premature death,” and “the EPA’s own studies say that bringing down the ozone limit to 65 parts per billion — the halfway point of the range suggested by science — would prevent 2,330 deaths, 4,600 emergency room visits and 1,300,000 lost school days by the year 2020.” (TIME) They say the nationwide costs to businesses of complying with stricter regulations could reach $90 billion, but that the savings to society from healthier individuals could reach $100 billion. Suddenly we’ve left the caustic realm of politics for the pure realm of economics. We’re talking about externalities, folks. If pollution from a power plant enters the air, leaves the property of the power plant, enters the property of a private individual’s home, enters that individuals lungs, and makes him sick, we’ve got a bona fide case of a negative externality. It is unjust for the individual to bear that cost, so we make the owner of the power plant bear the cost of reducing the pollutant particles that leave his property. Justice is served, society improves, end of story.
But of course it’s not that simple, and we can’t remain in the pure realm of economics for very long. The ugly head of politics emerges as soon as we start discussing what to do about it. It’s complicated enough that we can’t predict with certainty the consequences of new regulations. So we come up with models and estimates that allow the left to say that new regulations would save so many lives and the right to say that new regulations would cost so many jobs. (Note to leftists: Don’t try to say that lives are more important than jobs, or you must also call to ban driving since people die in car accidents on their way to work. Everything has trade-offs and life has risks that make life worth living. Note to rightists: Don’t pretend that mitigating some of those risks is never worth the trade-off.) Obama’s decision is interesting because it implies he is siding with the right’s belief that the costs of the regulation would be greater than the benefits, rather than the left’s belief in the opposite.
Now some may argue that there are fundamental problems that have nothing to do with a cost/benefit analysis. The ideal libertarian believes the government should not be regulating ozone levels at all. Ozone levels are relatively local – the recommended levels are exceeded in some counties but not most of them, implying that the miscreant levels do not dissipate far into the surrounding area. If a person objects to the ozone level around him, he is free to move to a different county with no such level. Now let us assume that if the person is underwater on his mortgage and can’t move right now that it is his own fault, and let us assume perfect flow of information so the person is completely aware of the ozone level of his county and every other. I still do not believe this discounts the economic argument of the negative externality, for what if every county had an objectionable ozone level, and there was nowhere to move? Would it not be the right of the government to regulate the manner in which pollutants trespass on private property?
But even if you allow this right to the government, you still have the “knowledge problem.” Regulating technocrats don’t know what levels are appropriate or what the effects of such regulations will be. They attempt to solve this problem by relying on scientists, but the results are still just estimates based on assumed inputs about the effects on health and the effects on business. Even hindsight analyses in a complicated economy will be full of assumptions. (How much did the drop from 84 to 75 cost and benefit us? When is the number low enough?) Some may say making these estimates is the best we can do, and if there’s a chance that a cleaner society is worth the investment (an unassailable tenet for the ideal progressive), than we should go for it. But at least for now, apparently Obama doesn’t think it’s worth the risk.