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NYU report: Environmental jobs claims often made 'out of context'

By Michael P. Tremoglie | May 21, 2012


NEW YORK (Legal Newsline) - A think tank affiliated with New York University School of Law has issued a report that "takes aim at the confusing debate over jobs and environmental regulation."

The study, released in April by the NYU Institute for Public Integrity, said, "Estimates of jobs gained or lost due to environmental regulations require much closer scrutiny than they're given. Very often these claims are made dramatically out of context, based on economic analyses that may not have been meant to support them."

It addresses how cost-benefit analysis can be used to appraise the effects environmental regulations have on the workforce. It criticizes the current impact models as not moving the debate on environmental protection forward.

According to the IPI, the study, "finds that too often, model results are cited without calling adequate attention to their limitations and assumptions. Different modeling choices can lead to drastically different conclusions."

Michael Livermore, IPI's executive director and lead author of the report, is quoted as saying, "Because these models are so sensitive, their results must be communicated properly. They do not lend themselves to the kinds of sweeping rhetorical statements you often hear in the political arena.

"Many times, claims about jobs and regulation find their way into a faulty conventional wisdom far removed from the evidence these analyses provide."

IPI believes that although "environmental regulation can lead to layoffs or hiring in specific regions or sectors, in a dynamic economy like America's, the overall effect is difficult to capture."

IPI maintains that given a specific environmental regulation, "these offsetting effects are ambiguous and hard to predict." It is its belief that in order to improve policymaking, the limits and doubts about the models should be recognized. The economic and social impact of the regulatory environment must be considered be considered in conjunction with the benefits, it claims.

"The effect of a regulation on jobs is important, especially in a downturned economy," Livermore said. "But those effects are likely much smaller than you might think by tuning into the political debate. Rather than staking the utility of a policy solely on this one element, basic economic principles would call for a more holistic view of regulation."

But others have expressed doubt about IPI's methods. Other experts who also work for think tanks and deal with environmental issues commented on the press release. They concurred some parts of what was said and they were divergent about other parts.

"Advocates do abuse economic models on regulatory impacts, in both directions," said James Sherk, a senior policy analyst with the Heritage Foundation.

"The claims that 'green energy' will create jobs are laughable and based on modeling only the benefits, not the costs, of a regulation. I'm sure people use models to overstate the costs of regulations too. That said, regulations do have large negative effects. The fact that models get abused doesn't mean regulations are not a problem."

Dr. Kenneth Green is a resident scholar at the American Enterprise Institute and an environmental policy expert. He said that while he concurred with the IPI's support for sound cost-benefit analysis, he wondered if IPI is as skeptical about the government's claims as they are about an industry group's claims.

He believes that IPI's criticisms of models are "true of most modeling methods, including the ones used by governments to legitimate their actions. So, if the government comes out with a study suggesting 'X' people are harmed by air pollution at current levels, and that, therefore, 'X' people would be helped by lowering those levels, they're using complicated models full of limitations and assumptions, and probably 'do not lend themselves to the kinds of sweeping rhetorical statements you often hear in the political arena.'"

One resident think tank scholar put it more bluntly. James M. Taylor, a senior fellow of environment policy at the Heartland Institute, was certain about the negative effects of government regulations.

"It may be difficult to exactly pinpoint the number of jobs lost or the amount of wealth destroyed by government regulations, but the negative economic consequences of government regulations are readily apparent and severe," he said. "Government regulations, especially regarding the environment, are like a giant ball and chain affixed to the ankles of our economy."

The NYU Institute for Public Integrity bills itself as a nonpartisan think that uses "economics and law to protect the environment, public health, and consumers."

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Organizations in this Story

The Heritage FoundationAmerican Enterprise InstituteHeartland Institute