EPA's Power Plant Rules Would Spur Job Creation -- Report
Despite claims that U.S. EPA's regulations are destroying jobs at a time of already high unemployment, two new sets of air pollution rules for power plants would create hundreds of thousands of jobs over the next five years, according to a report (pdf) released today.
The power sector is bracing for a slew of new federal requirements, including the proposed Clean Air Transport Rule (CATR), a program aimed at smog- and soot-forming pollution that travels across state lines. By next month, EPA must also propose new limits on mercury and other types of toxic air pollution to replace a George W. Bush-era program that was thrown out by a federal court.
Both sets of rules will require power plants to install new air pollution controls and build new power plants to replace older units.
And according to new research by the Political Economy Research Institute (PERI) at the University of Massachusetts, it will take about 1.46 million years of new labor to make those changes happen over the next five years -- the equivalent of 290,000 full-time jobs.
The study was commissioned by Ceres, an investor advocacy coalition that focuses on environmental issues. The group touted the findings this morning at a conference sponsored by the Blue Green Alliance, a coalition of environmental groups and labor unions.
"The long-term benefits from a cleaner industry, cleaner air and better public health for our citizens far exceed the short-term costs, and sticking our heads in the sand has never been America's way of meeting essential challenges," said Mindy Lubber, president of the investor group. "The rhetoric and debate is high and heated. The important thing for all of us ... is to look at the facts."
The job-growth estimates were based on projections that the two rules will force the power sector to invest nearly $200 billion to design, build and install equipment between 2010 and 2015. Those costs include about $94 billion for pollution controls and $100 billion for power plants with about 68,000 megawatts of generating capacity, making up for power plants that would be retired.
The projects would directly create about 640,000 years of work through 2015, or 128,000 full-time jobs, the study says. Another 820,000 years of work would be created indirectly, as other companies provide goods and services to the projects.
Supporters of the regulations say these jobs would make a much-needed dent in unemployment at a time when the economy is slowly recovering from the worst recession in decades. After the massive job losses of 2008 and 2009, the U.S. economy gained just 950,000 jobs in 2010, according to the most recent estimates from the Bureau of Labor Statistics.
But some industry groups and top Republicans in Congress argue that the new rules will harm the economy. These critics argue that ordering companies to spend money on pollution controls will ultimately raise unemployment -- or, at least, that it won't be as effective as leaving the money in the hands of the private sector.
In the long run, new regulations on power companies will lead to higher energy prices, making the United States less competitive and slowing job creation, said Margo Thorning, senior vice president and chief economist at the American Council for Capital Formation.
Rules for power plants don't typically cause many job losses in the short run because utilities can pass along cost increases to consumers, but higher electricity prices could eventually cause companies to relocate, Thorning said. She pointed to aluminum manufacturing, an energy-intensive industry that has started leaving the United States in search of cheaper electricity elsewhere.
Despite new rules for the utility sector, inflation-adjusted electricity prices fell by about 13 percent for U.S. residential customers between 1990 and 2010, according to the U.S. Energy Information Administration. Industrial prices also fell.
But aluminum producers shifted more of their production to countries such as Russia, China and Iceland, where energy costs were lower.
"What happens to industrial consumers who face electricity price increases?" Thorning asked. "Will they be able to expand their business, or will they decide that electricity prices are just too high, and move elsewhere? When you throw a pebble into the pond, the ripples extend very far."
'Green jobs' pitch
The new study dovetails with the message put forward in President Obama's State of the Union address: that environmental rules and protections will make the United States more competitive by growing an economy around cleaner forms of energy.
At the conference this morning, before the release of the study, the president's plan was touted by both EPA Administrator Lisa Jackson and Nancy Sutley, the chairwoman of the White House Council on Environmental Quality.
In addition to protecting health, environmental protections will boost the development of renewable energy and increase America's share of the $700 billion global market for environmental technology, Jackson said.
David Foerter, executive director of the Institute of Clean Air Companies, said the new study provides proof that environmental rules can create green jobs. Because the United States has historically imposed air pollution rules sooner than other countries, domestic companies have developed new technology and marketed it abroad, he said in an interview.
In 2008, the U.S. environmental technology sector led the world with $300 billion in revenue, $43.8 billion of it coming from exports, according to the trade journal Environmental Business International. The industry supported an estimated 1.7 million domestic jobs.
"We should not forfeit that lead," Jackson told the audience this morning. "We should not miss out on extraordinary opportunities to supply the world with environmental technologies that are made in the USA."
Environmental groups, which have supported the president's clean energy push, hailed the new study. But even without creating a single job, the health benefits of the new rules already outweigh the costs, said Lubber, the head of Ceres.
The transport rule, which was proposed last July and is expected to be finalized this summer, would prevent an estimated 14,000 to 36,000 premature deaths per year. It would do so by cutting down on the amount of sulfur dioxide (S02) and nitrogen oxides (NOx) released by power plants, as well as other pollution.
Put in dollars and cents, the rule would have an estimated $120 billion to $290 billion in annual benefits, compared with costs of $2.8 billion per year. The toxic pollution rules are expected to be much more expensive, but the agency hasn't projected the costs and benefits of its upcoming proposal.
But when it comes to jobs and the economy, many Republicans have been skeptical about the new power plant rules and the president's plan. The divide was clear last week when Jackson made her first Capitol Hill appearance of the new Congress.
Sen. James Inhofe (R-Okla.), the ranking member of the Senate Environment and Public Works Committee, told Jackson he will focus this year on the upcoming limits on toxic pollution from power plants. Rules like these will show whether the president is "serious about jobs and enhancing American competitiveness," he said in his opening statement.
Sen. Tom Carper (D-Del.), chairman of the Senate Environment and Public Works Committee's clean air panel, said today's study only strengthens the case for the new regulations.
"These are American jobs in manufacturing, installing and operating modern pollution control technology and producing clean energy -- jobs that come at a crucial time as our nation's economy continues to recover and grow," he said in a statement. "Over the last four decades, we've made great strides in reducing our nation's air pollution. But more can be done, and more must be done if America wants to compete in this emerging global clean energy economy."
Though most of the jobs created by the power plant rules would not be permanent, researchers found that the new rules would lead to a permanent increase in employment in the power sector, said James Heintz, the author of the study.
Jobs would be lost when older power plants are shut down, but the power sector would see a net increase of 4,200 employees, the study concludes. That's because the new control equipment is more labor-intensive, meaning power plants will need more employees to operate and maintain their fleets, said Heintz, who is PERI's associate director.
"There's a lot of rhetoric saying that dollars being spent here are going into a black hole, which is patently untrue," Foerter said. "These investment dollars are creating jobs, and they're creating huge health benefits."