"Costly" Government Regulations Shown to Yield Big Returns
Minnesota Health Plan
Information and Resources
by Senator John Marty
December 4, 2003

Virtually all of us have been irritated by some government rule or regulation, whether a local city ordinance or a federal rule. Sometimes they are poorly thought-out, too rigid, or they simply make no sense.

Businesses lobbying against environmental or other government rules frequently attack them as costly and burdensome, taking advantage of public skepticism of government regulation. They hope the public will believe that the Environmental Protection Agency (EPA) and other government offices exist solely for the purpose of harassing business and wasting money. The idea that government regulations might be designed to protect the public health and safety or to prevent pollution is often forgotten.

The most comprehensive cost/benefit study conducted on government regulations was recently released by the Bush administration's Office of Management and Budget (OMB). The OMB has concluded that many of those regulations have a major positive impact on the environment and public health. This report surprised many because it came from an administration that has been preaching the opposite of the report's results as it undermines environmental standards.

The OMB report issued in September reviewed 107 of the most significant government regulations issued during the past decade, and found that the environmental, health, and other benefits the public received far exceed the costs of complying with the regulations. In other words, these major regulations served the public well.

Energy efficiency regulations for central-air conditioners saved consumers more through reduced electric bills than the increased purchase cost, even without factoring in the environmental and health benefits from lower electric consumption.

EPA regulations limiting emissions from engines used for recreational, non-road purposes cost $192 million per year to comply with, but save the operators more than twice that -- $410 million/year -- in lower operating costs. On top of that, there are even bigger savings in health and environmental protection, estimated between $900 million and $7.88 billion in air quality benefits this year! And this does not even include some benefits that the OMB recognized but was unable to quantify, such as reductions in infant mortality from the cleaner air.

The Washington Post summarized the OMB report saying that "the health and social benefits of enforcing tough new clean-air regulations during the past decade were five to seven times greater in economic terms than were the costs of complying with the rules. The value of reductions in hospitalization and emergency room visits, premature deaths and lost workdays resulting from improved air quality were estimated between $120 billion and $193 billion from October 1992 to September 2002. By comparison, industry, states and municipalities spent an estimated $23 billion to $26 billion to retrofit plants and facilities and make other changes to comply with new clean-air standards."

This report did not receive widespread public attention. One suspects this is due to the Bush administration's dissatisfaction with the results of its own research and desire to downplay the report.

This December, the Minnesota Public Utilities Commission is reviewing a "Metropolitan Emissions Reduction Proposal" to reduce air pollution from three of Xcel Energy's urban electric generation plants. Nobody pretends that the proposal is inexpensive. But the benefits to the environment and public health are too great to ignore. Government should serve the long-term public interest instead of settling for the cheap, shortsighted approach that kills people and costs more in the long run.

Worker safety rules save lives. Environmental standards protect our planet and improve public health. Product safety regulations prevent injuries and deaths. The seat belt regulations imposed by the federal and state governments were strongly opposed by the auto industry. Yet they saved over 12,000 lives in 2001 alone, several times the number of lives lost to the terrorist attacks of September 11.

Government rules and regulations are not inherently good or bad. As the OMB study shows, thoughtful, well-written regulations can save lives and money. Each proposed change should be carefully reviewed on its merits. Despite the anti-regulation rhetoric of certain lobbying groups, our health and well being, as well as that of future generations, requires that industries disregarding health, safety, and the environment need regulation to protect the public interest.


jmsig.gif (2217 bytes)

 Previous issue 

Index

 Next issue 


Permission to quote or reprint material from To the Point! is granted if the author is credited.
Copyright � 1999-2018, John Marty