– Washington-style abuse of economy (special to the Harvester)
– By Richard L. Lester, president, Chamber of Commerce of the United States
– A key challenge Americans must urgently face is whether we can reduce environmental regulatory costs without sacrificing basic environmental goals. The problem is not so much the air and water pollution standards themselves. After all, business people do live here too! So while some standards are neither reasonable nor cost-effective, the real problem is the rigid and costly way they are enforced. Regulators want to dictate both what industry must do and how it must do it. That does not make any sense.
By one estimate, the air and water pollution control regulations issued by the Environmental Protection Agency account for 77 percent of all the added costs industrial firms incur in complying with federal, state, and local regulations, then blend in the dangerous brew of excessive federal spending, taxation, and printing of money, it’s clear what you’re going to create: Higher inflation, lost jobs, wasted energy, lower productivity, and a weakening of America’s ability to compete in world markets.
The recent economic distress signals that we’ve seen dominating the news – wild increases in the prices of gold and silver, the dollar under siege, and panic-selling on Wall Street – all provide dramatic proof that Washington must stop this abuse of our economy.
In the regulatory area, the business community should be given the opportunity to provide leadership and use its expertise to reduce both costs and pollution. Take a look at a case in point: Armco Inc., a steel company in Middletown, Ohio. Today’s environmental protection regulations spell out detailed requirements for control systems on each separate smokestack or device. Armco already effectively controls all primary sources of air pollution having spent more than $188 million since 1955 on various air pollution controls. But under current regulations, it must do still more. It must attempt to capture those last few wisps of smoke – fugitive emissions – which occur only sporadically. To do so would cost more than everything the company has spent so far.
Armco has proposed a better alternative, the bubble concept, which could allow the company to produce cleaner air than today’s rules, yet save vast sums of money. This concept would replace stack-by-stack regulations by establishing an imaginary bubble over the entire facility. EPA and the state would then decide total allowable emissions coming from that site. In return, plant managers would be permitted to decide which mix of pollution controls for the entire plant would be most cost effective – in other words, the company could determine how to get what EPA says must be obtained.
The savings could be tremendous, and not just in terms of capital expenditures. With the bubble concept in place, the steel industry alone could save 4.3 million barrels of oil a year. And by applying the concept throughout American industry the potential for increased energy conservation would be enormous.
Business has come up with a better idea … will government listen? Business leaders are not asking for special favors; they’re asking for common sense, for the basic recognition that they are the employers and providers of America, and finally, for the understanding that they can only meet those responsibilities if their firms are not pushed over the financial brink by runaway regulations.
FFVA is a member of the Chamber of Commerce of the United States.