Environmental Performance or Productivity Loss?

Abstract

The principle of sustainable growth and development has influenced much of the environmental policies that have come into existence in the last three decades in the USA. Since the establishment of the U.S. Environment Protection Agency (EPA) in 1970, the regulations put in place have been increasingly stringent on the environmental standards they set over time. For instance, the Clean Air Act introduced in 1963 and the Clean Water Act founded in 1948 have been amended multiple times, each time tightening the control on the type and amount of emission allowed into the environment. This has no doubt accrued much benefit to the society within the USA in the form of reduced morbidity, increased recreational opportunity, cleaner living environment, increased ecosystem vitality, and possible increased land values (Palmer et al. 1995). Such outcomes are essential for an environmentally sustainable future and are also the cornerstone of a society that holds itself accountable to future generations. However, at the same time concerns have also been raised as to whether these benefits are worth the cost of such regulations. In addition to the direct costs of pollution abatement, proponents of this view have blamed stifled economic growth, decline of labor and capital productivity, as well as loss of jobs on such increasingly stringent environmental regulations.