During a Maryland General Assembly debate late Monday night over legislation to address stormwater pollution in the Chesapeake Bay, opponents threw around the “b” word like a weapon -– as in billions of dollars in potential costs.
Somebody always waves the cost cudgel in fights over environmental regulations. But it is important to recognize what economics researchers over decades have concluded about the real costs vs. benefits of regulations, such as those meant to protect the Bay. The economic upside of environmental rules, especially for human health, often far outweigh the downside.
In the argument over stormwater pollution fees in Maryland, for example, the economic benefits of cleaner water–- for example to tourism, restaurants, watermen, and even waterfront real estate values -– should be factored in when local governments add up potential costs.
Here’s the big picture: A 2010 report of the nonpartisan U.S. Office of Management and Budget concluded that U.S. Environmental Protection Agency regulations from 1999 to 2009 generated as much as 18 times the economic benefits as the costs. The regulations produced a total of $26 billion to $29 billion in costs, but $82 billion to $533 billion in benefits.
“The cost of complying with environmental regulations is almost always less than advertised,” the Economic Policy Institute concluded in another report. “The evidence shows a clear pattern of overestimation…. The early estimates were at least double the later ones, and often much greater.” (link)
An analysis of economic literature by the World Resources Institute explained that cost estimates for meeting environmental rules are exaggerated because industry and the government often focus on outdated technologies, and fail to take into account the natural human creativity.
“Technological change, including innovation and commercialization, minimizes pollution abatement costs,” the World Resources Institute wrote.
When confronted with a challenge (such as the need to reduce stormwater pollution into the Chesapeake Bay to comply with new EPA pollution limits) we should not assume that cities and counties will be forced to slog through with expensive old methods of the past. New businesses will likely spring up to tackle the problem as engineers invent less capital-intensive stormwater control devices, and pioneer natural green strategies for slowing and filtering rainwater.
The likelihood of enterprise and business flourishing from the Bay pollution limits was the conclusion of a recent Chesapeake Bay Foundation report, “Debunking the Job Killer Myth: How Pollution Limits Encourage Jobs In the Chesapeake Bay Region.”
The report projects that stormwater control projects alone could create 178,000 full-time equivalent jobs across the region over the next five years, including 80,000 in Pennsylvania, 36,000 in Maryland, 10,000 in the District of Columbia, and 52,000 in Virginia. Engineers and construction workers will likely put their brains and backs to work building out-of-the-box filtration systems to clean the rain water that washes across roads, parking lots, and developments into streams and rivers that feed the Bay.
Some of those jobs are already springing to life in Montgomery County, Maryland (pictured at top), where roughly 3,300 full-time equivalent positions are being created to build about 300 stormwater control projects, including roadside "biofilters" (natural biological filters that use plants and soil to absorb rainwater).
So when you hear the “b” word -– think “businesses,” and open your mind to all the creative new enterprises that will rise in this next phase of the Bay cleanup effort.
By Tom Pelton
Chesapeake Bay Foundation