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Thursday, March 1, 2012

Economist: Clean Air Regs Cost U.S. $21 Billion A Year But Produce $100 Billion In Benefits

Clean air regulations cost the United States about $21 billion per year in lost productivity, a University of Chicago economist said this afternoon.

But the benefits of environmental regulation—improved health, reduced infant mortality, increased property values—are typically estimated at more than $100 billion, said Chad Syverson, professor of economics at the University of Chicago Booth School of Business.

“It looks like—you’ve got $21 billion on this side, $100-something billion over here—the scale is actually suggesting that the marginal benefit of regulation is quite a bit bigger than the marginal cost, at least over the sample,” Syverson told about 40 people gathered in a campus lecture hall.

Most researchers have assumed that environmental regulation causes lost productivity, but in 1995 economist Michael Porter suggested that regulation may improve productivity by spurring industry to invest, investigate, and innovate. Read More