Friday, September 29, 2006

Bush, CO2 and job losses - same excuses

One of the main themes of the "globalisation and the environment" debate is the link between environmental regulations and jobs.

We recently completed a UK study that showed that there was little or no relationship between environmental regulations and job losses. This merely reinforces a couple of US studies examining the same question. The literature review of our paper gives more information.

Although there may of course be job losses related to specific industries the net job losses may be very low for numerous reasons. For example, new "green" jobs will be created and also high skilled, high tech job created related to the Porter or innovation hypothesis. Secondly, as we also show in our previous papers looking at the pollution haven hypothesis, heavy polluters and also capital intensive and therefore largely imobile. It is not so easy, even with increased regualtions, for these massive industries and large energy users to just up sticks and move to a developing country.

So today, we hear that Bush has no plans for CO2 legislation See this article. I have just picked out three paragraphs that give the gist of the story. Always good to see the "White House" spokesman turning up. Instead of job losses it really all relates to the third paragraph. What is so wrong with big decisions?

NEW YORK - The Bush administration has no plans to ease its opposition to national limits on greenhouse gas output despite talk that a change may be under consideration, a White House spokeswoman said on Thursday.

"The president has said continually said that one of reasons he doesn't like a mandated cap is because it has the potential to move jobs overseas and hurt the economy," said Kristin Hellmer, spokeswoman for James Connaughton, the chairman of the White House Council on Environmental Quality.

A national cap on emissions would mean heavy industries in the United States, the world's top emitter of greenhouse gases, might have to make big decisions, like investing in alternative energy or clean-burning natural gas.

The issue for economists is to get out there are do a comprehensive US study that can provide some numbers that either supports or refutes Bush's claim.

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