For Immediate Release: Tuesday, February 7, 2011
Contact: Phoebe Silag or Karen Conner, news@epi.org 202-775-8810 

Final EPA toxics rule will lead to modest short term job growth, new EPI study finds

A new study by the Economic Policy Institute (EPI) finds that the Environmental Protection Agency’s (EPA) finalized national standards on mercury, arsenic and other toxic air pollution from power plants will have a slightly positive impact on job growth, generating roughly 117,000 jobs by 2015. While the “toxics rule” would primarily benefit the economy through large improvements to health and quality-of-life, it has been opposed by those claiming it would hamper job growth; today’s study finds that the claim that the rule will harm the job market is not true.

The “Toxics Rule” and Jobs: The job-creation potential of the EPA’s new rule on toxic power-plant emissions by economist Josh Bivens updates an earlier study that analyzed the likely job impacts of the proposed version of the toxics rule.  This issue brief finds that the conclusions of the earlier report largely stand: the final toxics rule will lead to modest job growth and have no measureable job implications in the longer term.  Specifically, this issue brief updates the previous paper’s employment numbers, taking into account both the new data from the regulatory impact analysis (RIA) of the final toxics rule as well as updates to the previous paper’s findings that were likely excessively conservative in calculating net new job creation.

“The current job market slump is not a reason to delay the implementation of the final toxics rule,” said Bivens.  “In fact, the troubled economy is a good reason to implement it quickly.”

There will be a forthcoming companion paper, Macroeconomic effects of regulatory changes in economies with large output gaps, which will explain that the methodology used in the earlier work was too pessimistic in its assumptions, and that the actual effect of the toxics rule on job growth is likely 30-40% larger than was indicated by the earlier paper’s methodology. However, even this earlier methodology leads to the conclusion that the toxics rule is a modest job creator.

* Dr. Bivens will give testimony on the job- impact of the EPA toxics rule Wednesday, February 8, 2012 at 10 AM Eastern before the Subcommittee on Energy and Power of the House Committee on Energy and Commerce.

###