Are Environmental Regulations Hurting the Economy?

In 1974, the major economic variables — the consumer price index, the unemployment rate and the real GNP — were all heading in the wrong direction. With such severe economic problems, both top Administration officials and leading business executives questioned whether the federal government's environmental regulations so burdened the economy that they should be relaxed. In light of the numerous books and articles published in the past decade by environmental economists, to say nothing of all the reports churned out by the U.S. Environmental Protection Agency in its five years of existence, one might ask why such a debate over the economic impact of environmental regulations even exists. Actually, so much of the work of economists was designed to justify the use of effluent charges or to develop models of the interactions among the environment energy and the economy, that little had been done on the actual expenditures and their past and anticipated effects. To help resolve the debate, the Joint Economic Committee of Congress conducted three: days of hearings on the problem in November 1974, inviting testimony from leading government officials concerned with the environment and from executives of three major industries which have been heavily impacted by environmental regulations.