The EPA’s Challenge and the Rock & Roll Granny

Lisa P. Jackson has a tough job running the EPA.  This article highlights some interesting politics.   For profit firms are happy to overstate their compliance costs with her new regulations.  Ideally, Jackson’s staff can correctly estimate the true regulatory costs but this is tricky because firms differ with respect to their ability to comply and many of these regulations have never been rolled out before. As an optimist, I believe that among diverse firms that some “green” firms will have an easy time complying while other firms will not.  Thus, such regulation leads to industrial churning as “brown firms” exit and new “green firms” enter the industry.  The lobbying challenge occurs because the “green firms” (who will enter the industry because of the new regulations)  do not exist yet.

On the benefits side, what are the benefits of environmental protection? How much cleaner is the air if the EPA regulates mercury? How much do we value reductions in mercury levels? Both of these are very hard questions to answer.  So, we have an asymmetry.  The costs of regulation occur now and are blown up and are salient and the benefits are hard to quantify.  The article puzzles over why President Obama’s team spends little time with Ms. Jackson but in the midst of a recession her efforts must be perceived as counter-productive to short run “stimulus” goals.  As I have argued before,  recessions are bad for the environment  (because we aren’t in the mood for green love). 

Switching subjects,  Jane Scott  lived quite a life and got to see Deep Purple in concert.