Wednesday, July 31, 2013

No! Next Question?

McCarthy made a full-throated defense of her agency’s right to address greenhouse-gas emissions and other pollutants, saying that air-quality regulations and environmental cleanup efforts have already produced economic benefits in the United States.

“Can we stop talking about environmental regulations killing jobs, please?” she asked, prompting loud applause. “We need to embrace cutting-edge technology as a way to spark business innovation.”
No, we cannot stop talking about regulations killing jobs, even if you use "pretty please."

There is an essential trade off between costs and cleanliness that needs to be constantly watched.  It's too easy for EPA to call on industries and others to use technologies that cost more and produce less goods and services (i.e., jobs).

Let me give an example from my experience.  Nitric acid (HNO3) is a bulk commodity that comes in a number of grades of purity.  It is made in massive quantities from ammonia, which in turn is made in even more massive quantities by reacting nitrogen gas in the air with methane (natural gas).

For laboratories, the bottom would be technical grade.  We would use it to clean glass and plasticware for use in chemical analysis.  It was cheaper than beer, at least cheaper than expensive beer.  We would never use it for any chemical analysis.   Next came reagent grade.  While cleaner than technical grade, it had significant amounts of trace metal impurities that would interfere in our low level analysis, but it could be used for ordinary analyses for other things.  It would cost about $50 a gallon.  Next came "trace metal grade" nitric acid, specifically prepared for trace metal analysis, with low, and more importantly, measured concentrations of trace metals.  We could use this for some routine work involving trace element analysis, and it cost about twice as much as reagent graded.  Finally, above that were several different grades of "ultra-pure" acid, prepared and handled very carefully to produce the lowest practical amount of contaminants.  We used it when our samples were expected to be very low (as many environmental samples are) and we needed it.  Now, this stuff was expensive, on the order of hundred of dollars per liter.

The point is that the higher the cleanliness used, the more energy and expense went into producing a smaller amount of cleaner material, hence the higher prices.  Call it the principal of "diminishing returns and exponentially increasing costs."

Environmental cleanup follows the same model.  The first part, probably 3/4, is fairly easy, and relatively cheap to impose, but increasing cleanliness above that point gets more expensive rapidly, and the returns diminish, as most of the cleanup has already occurred.  Those increasing costs come at the expense of lower production, and higher prices for the goods being produced, and less gain for the economy.  Counting the number of bureaucrats necessary to enforce the law doesn't  work because they don't produce goods or services to contribute to the economy, they only serve to stifle the creation of goods and services.

That's not to say we don't need environmental regulations; we do. But they need to be considered in the proper light of how clean is really clean, how much economic activity we can afford to crush.  The EPA, as it currently exists, does not really accept the idea of such a trade off.

So yes, the answer is No!

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