Obama’s climate regulations hurt businesses
On multiple occasions, representatives from the Obama administration have admitted under questioning by members of Congress that its climate policies and regulations will have no measurable impact on present or future global temperature, sea-level rise, or any other of the myriad problems it claims will flow from the continued use of allegedly “dangerous” fossil fuels.
Regulations are supposed to improve safety and welfare, but these regulations are poorly conceived, designed, and executed. Research also shows they will almost certainly cost jobs and reduce income without providing any real climate benefits.
Federal agencies are supposed to carry out cost-benefit analyses to determine whether a proposed rule is justified. However, government agencies self-certify their own claims that the proposed regulations’ benefits exceed their cost. Clyde Wayne Crews, vice president for policy at the Competitive Enterprise Institute, points out, “Having agencies audit their own rules is like asking students to grade their own exams.”
Reports conducted by government watchdogs all have found regulatory agencies grossly overstate benefits and underestimate, or ignore entirely, the significant costs of the rules they are proposing. Only the agencies themselves and the radical environmental lobbyists pushing new regulations to limit fossil-fuel use deny this.
For example, the U.S. Environmental Protection Agency (EPA) and the Department of Transportation’s National Highway Traffic Safety Administration recently finalized new fuel-efficiency standards for medium- and heavy-duty vehicles, as called for by Obama’s Climate Action Plan.
The new standards apply to semi-trucks, large pickup trucks, vans, and all types and sizes of buses and work trucks for model years 2018 through 2027. Depending upon the size of the vehicle, the rules could add as much as $15,100 to the price of a large truck within the next decade.
Because Congress recognized it may be impossible to meet the new standards, it enacted changes to protect so-called “laggards,” allowing truck manufacturers unable to meet the new standards to pay fines rather than have their vehicles disallowed, potentially forcing the companies out of business.
EPA claims new truck purchasers would recoup the higher cost of the vehicles in less than two years through fuel savings, but economist Nicolas Loris, the Herbert and Joyce Morgan fellow at The Heritage Foundation, says that is extremely unlikely, since if such significant savings existed the federal government would not have to force the technological change on industry in the first place; manufacturers would have simply built the more-efficient engines on their own to increase profits.
In another case, the Department of Energy (DOE) issued regulations for commercial refrigeration equipment, pegging the costs of the refrigeration efficiency standards to manufacturers at $165 million annually, while projecting total benefits in excess of $4 billion. This may sound good, but only until you realize the costs are imposed on Americans while the benefits estimated by DOE will be enjoyed by people in other countries.
When federal agencies undertake cost-benefit calculations for new rules, the law usually requires the analysis be limited to the domestic impact of the rules. DOE admits a purely national calculation of the benefits of the refrigeration efficiency rule would be miniscule. So, in an attempt to justify the rule, it offered an inflated calculation of the benefits people in other countries will receive.
Manufacturers challenged the rule in court, arguing it is arbitrary and unlawful to consider global costs. Ignoring U.S. regulatory and judicial precedent, the court upheld the rules.
Energy efficiency, while generally a good thing, is only one factor of many that inform consumers’ choices when they are shopping for vehicles and appliances. When the federal government mandates particular efficiency standards, it reduces consumer choices, prioritizing the government’s quest for efficiency over product traits people may care more about, such as cost, durability, ease of repair or repair costs, reliability, safety, and size.
Americans shouldn’t be forced to put up with regulations that harm them and reward global competitors, especially when they do nothing to protect the environment.
H. Sterling Burnett, Ph.D, is a research fellow on energy and the environment at The Heartland Institute.