Harming others for personal profit is not just morally wrong, it also costs money and jobs. Environmental regulations promote justice and efficiency. They put the costs of pollution on the books of those who pollute, rather than distributing those costs to others. For this reason, the benefits from EPA regulations exceed their costs by an average of more than 10 to 1, among the best ratios of all federal agencies. The annual human health benefits of the Clean Air Act, for example, were greater than a trillion dollars in 2010 and will be nearly 2 trillion dollars by 2020. It turns out that cleaner air makes healthier people, the benefits of which ripple through the economy, by some accounts increasing national GDP by as much as 1.5%.
Environmental regulations also create jobs. They focus our investments on things that make us more productive in the long run. We will spend our money somewhere, why not invest it rather than consume it? Indeed, as EDF economist Gernot Wagner argues, “the numbers just for the EPA toxics rule speak for themselves: up to 17,000 lives saved, and anywhere from 28,000 to more than 150,000 jobs created. That should satisfy even the worst cynics.”
Current accounting practices ignore many trillions of dollars of costs. It is no wonder that corporate interests invest so heavily in lobbying governments–they have much to lose if the playing field is leveled. Alarming trends include aquifer depletion, climate change, fisheries collapse, and hazardous pollutants. Poor accounting practices cause these problems. They allow profits to be privatized but costs to be socialized. That is, a few people benefit, but others pay the costs. There is nothing wrong with making a profit. Just do it fairly. The age of uncaring accounting must pass. The Tea Party and Occupy Wall Street are spot on when they critique, in the words of Sarah Palin, crony capitalism.
Fortunately the uncaring unfairness of free market failures can be corrected by subtle but sophisticated economic policies that improve accounting practices. Wagner gives numerous examples in his book, subtitled How Smart Economics Can Save the World.
We must find the will to implement these policies.
We need to start caring.