Editor's View: Regulation Cost/Benefit
Environmental regulation has impacted us in many different ways, and it is easy to regard it as a burden and an expense. Yet, when we consider the greater picture, there are many parts of this issue that have been very positive, not only for our health, but for our business.
Consider the Clean Air Act (CAA), developed to regulate six principle pollutants: nitrogen dioxide (NO2), ozone (03), sulfur dioxide (SO2), particulate matter (PM), carbon dioxide (CO2), and lead (Pb). These pollutants have been linked to cardiovascular illness, respiratory problems, ozone depletion, acid rain and global temperature increases. Since 1970, the aggregate emissions from these six pollutants have been cut by 48%. Prior to the CAA, these pollutants were increasing in the atmosphere at an alarming rate. CO2 emissions were 30% greater, methane was double, and nitrous oxide (N2O) levels were 15% greater than pre-industrial times.
We all agree that cleaner air is important and we want to contribute. But many businesses have been seriously impacted by the cost of environmental regulation. Again, there is more to the story of regulation and the cost. Consider that during the last 23 years while regulation helped reduce the volume of harmful air pollutants, the USGDP increased 164%, energy consumption increased 42%, and vehicle miles traveled increased 155%. We can grow and still fight pollution.
Also, think of the huge impact that regulation has had on the development of new industries. When Pieter de Lange invented thermoset powder coating in the early 1960s, it was because of environmental pressures. That led to the development and sale of materials and equipment to support the new technology. And I can tell you from experience that most companies realize an excellent payback on conversion.
In addition to powder coating, there are low-VOC liquid technologies that outperform older coatings with lower solids content and provide more coverage per gallon. There is a cost to adopt new technologies, but there are profits to those who sell them and benefits to those who buy them.
We still have a lot of work to do. Scientists believe that the detrimental effect of air pollution on the upper ozone layer continues. The impact of air pollutants on the upper ozone is a slow process, so we are still being affected by the practices of the past.
The hole in the ozone is increasing. We have 276 million people in the United States and we emitted 18 million tons of VOCs in 1997, more than twice the volume of any other industrialized nation, including China, even though they have four times as many people as we do.
If you have been in industry for a long time, you have been subjected to rules that seem to be a burden, and in some cases do not make sense. We all know that the scientists and industrialists do not always agree. Yet we do have the same goals and the same desire for a prosperous and healthy standard of living. We need to be alert to ways to make these goals work in harmony.
It is tempting to focus on the cost of regulation and undervalue the benefit. But balance on this issue is critical to the future of society and business. We need to develop new technologies that will spark new jobs and new industries. Protection of old ways of doing things is thinking in the past. We need to support rules that are effective and based on sound science. We need to know what rules will have the desired impact and stimulate business, and those rules that carry a cost with no return. The CAA has been hard on industry in many ways, but it has ultimately worked to reduce pollution and stimulate new businesses.