Chapter 9: The macroeconomic effects of environmental regulation: employment, trade and competitiveness
Environmental regulation is typically blamed for macroeconomic mishaps. For example, Crandall (1981) argues that ‘it has become increasingly fashionable to attribute a myriad of our economic and social difficulties to excessive government regulation’. Specifically, regulation is blamed for soaring inflation, lagging GDP growth, declining productivity growth, the decline in the value of the dollar, and even general reductions in the animal spirits of entrepreneurs. These claims are invariably politically motivated and supported by no more than circumstantial evidence, which rests on the coincidence of the advent of environmental regulation and the stagflation of the 1970s. Pollution control legislation in the US began in earnest in 1965, when amendments to the Clean Air Act set national standards for motor vehicle emissions for the first time. The incidence of regulation intensified in the 1970s with the passage of the National Environmental Policy Act and amendments to the Clean Air Act. In 1972 the Clean Water Act was passed, and revisions to this act and the Clean Air Act were adopted in 1977. The consequence of this legislation was a massive and sudden shift of resources towards pollution control. As a result, spending on pollution control (which was insignificant in 1967) grew rapidly during the period 1968–78. Much of this increase was required to bring existing facilities into compliance with regulation.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.