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Now, I'm not saying that environmental regulation is inherently bad. But, there is a cost associated with it. The Greenies tend to overlook and/or underestimate the cost of environmental regs. The other side is that we don't want to live in a toxic wasteland (that's what New Jersey is for! )

http://www.sdbj.com/industry_article.asp?aID=80383656.5330777.1753908.648734.6898876.839&aID2=134907

At the time of the rule-making, the California Air Resources Board estimated the cost of compliance in the state to be $3 billion, but those in the industry said $13 billion.

“The board’s retrofit estimates are based on technology that does not currently exist,” said Kennedy. “They don’t really have good information on whether that technology will be available or what it will cost to install, operate or maintain it. There is no prior experience with such a massive effort to modify such a large volume of equipment.”

Would anyone really argue that we should pollute as much as possible? I certainly understand why business doesn't want to drop $13 billion into this. And, the public needs to realize that ultimately, the public will pay this cost. The cost of construction will go up in California if these regulations are enacted. And since most big construction projects are publicly-funded (highways, reservoirs, waterlines, etc.), that means it will cost more tax dollars to do that work. Industry can't do work for free, they'll recoup the cost through future construction contracts. Even on the private-side, it'll mean that it costs more for commercial and residential development, because the construction industry passes that cost onto the developer, and they will pass it on to the public through higher prices for merchandise, services, or for residential work - home costs.

I wouldn't worry about it to much. The way I hear it California has money to throw around these days.

The public ultimately pays the cost of everything. The question is how the cost is distributed among the members of the public.

The issue of "externalities" has received a lot of attention from economists and applies to pollution which is an example of a negative externality. An externality is a cost (or profit) which is not included in the price of the product.

For example, a paint factory on a river, discharges toxic waste into the river, which damages an oyster fishery downstream. Cleaning up the toxic waste will obviously have a cost associated. Rationally, the cost of clean-up should not exceed the gain (or rather, the reduction of loss) to the oyster fishery.

In the case of the Air Resources, the Board has estimated $3B dollars and industry has estimated $13B for the cost of clean-up.

Firstly, the industry probably doesn't have any better idea what the real cost will be than the Board. The real cost is probably in between the high and low estimates.

Secondly, without some attempt to quantify the negative externality of the pollution, there is no idea of how useful any clean-up would be.

At the moment, the public is presumably paying some kind of cost of air pollution -- increased medical insurance rates because of the higher prevalence of asthma, for example. (My guess.)

Clearly, if the cost of air pollution were $20B the public would be stupid not to insist on a clean-up and pay for it if necessary. OTOH there may be zero cost of pollution.

Yeah, and the rest of us have extra money laying around to pay all the price hikes. (Sarcasm)

Another grand 'unfunded mandate' from the Federal Government. Raising taxes on the individual is unpopular. Raising taxes on industry is only unpopular with the top of the industry, most of the rest of America doesn't care.

I have to agree with Killkrazy on several fronts.

1) The 'true' cost is unknown. Industry will say it cost the X dollars based on selling current equipment at a reduced rate to 'unload' it. They won't factor in that the equipment had already depreciated some, which gave them tax benefits, and they would have to replace it eventually anyway.
2) We don't know the cost of pollution to the US. That's hard to quantity, if not impossible.

But, I think this is just another grand example of how Congress wants you to think they're doing a lot of good and how it won't cost the US taxpayer a red cent.

The fact that people think it's acceptable to stick a dollar price on destroying the environment is one of those things that keep me awake at night. It's like people don't think even a few years ahead.

Kilkrazy wrote:At the moment, the public is presumably paying some kind of cost of air pollution -- increased medical insurance rates because of the higher prevalence of asthma, for example. (My guess.)

I think it is nice that you think people have health insurance.

lord_blackfang wrote:The fact that people think it's acceptable to stick a dollar price on destroying the environment is one of those things that keep me awake at night. It's like people don't think even a few years ahead.

People attach dollar values in general to show that it isn't cost effective to destroy natural resources via byproduct of manufacture. You notice most companies don't leverage the environmental "cost" statistics, firstly because it makes them look bad and secondly because while difficult to quantify the overall profit loss suffered by environmental degradation is nearly always much in excess of the profit to be gained by it.

I think there is a misconception about how easy it is to just pass the cost onto the consumer.

If a company is making say, $1000 yearly profit, and they suddenly have to pay $500 a year because of how much they pollute, they could just try to hike up all their prices to try to make up the $500. Unfortunately, people still have to be willing to pay the price they're asking. If the business is competitive, then people may be able to just go somewhere else. Even if every business they're competing with is hit equally by the pollution tax, they will still need to compete with each other, and you'd get a result of something more like them being able to pass, say, half the cost onto the consumer. Obviously this all changes depending on how price-elastic what they're selling is, if they're a monopoly, etc, but the general idea is that they can't just magically pass all the cost onto the consumer unless it's special circumstances. The reality is more that the price will be slightly higher, and they will end up selling less of them, at some new equilibrium point.

That being said, it's still a cost, and even if only $250 of it gets passed on in price increases, the company has $250 less dollars to spend on...whatever. But assuming it's priced even close to correctly, that cost is saved elsewhere (less cleanup, less lung cancer, higher quality of life in cities, etc). It's more moving cost around than just creating a money sink.

The beauty of the idea is that companies like to do things to save money, be more efficient, etc. So if polluting less saves them money, they will be incentivized to actually try to find ways to pollute less. Without things like cap and trade or other pollution limits/laws/etc, they have little to no incentive not to pollute. Since the environment is a shared resource, no one is correctly personally incentivized to preserve it (this is known as the free rider problem as the air is a public good - http://en.wikipedia.org/wiki/Public_good).

This is the congress doing something good. The other options, such as letting them pollute however they want, or making up regulations that have nothing to do with actually internalizing the externality, are failures.

lord_blackfang wrote:The fact that people think it's acceptable to stick a dollar price on destroying the environment is one of those things that keep me awake at night. It's like people don't think even a few years ahead.

Everything has a cost associated with it and the environment is no different. I don't think saying that discussing the practicality of trying to find the balance of implementing environmental policy and it's practical cost really is the same thing as people saying a big feth you to the environment. You say it keeps you up at night but how much of your money do you give to these policies? How much would you be willing to fork over willingly? Is 75% of your pay ok? 50%? 90% I mean, you do care about the environment and the rest want it destroyed so it shouldn't be a problem since you think that cost shouldn't be a factor.

Ahtman wrote:

Kilkrazy wrote:At the moment, the public is presumably paying some kind of cost of air pollution -- increased medical insurance rates because of the higher prevalence of asthma, for example. (My guess.)

I think it is nice that you think people have health insurance.

I know perfectly well that there are at least 40 million people in the US without health insurance.

One might question the utility to those without health insurance of reducing respiratory diseases caused by pollution.

Kilkrazy wrote:

Ahtman wrote:

Kilkrazy wrote:At the moment, the public is presumably paying some kind of cost of air pollution -- increased medical insurance rates because of the higher prevalence of asthma, for example. (My guess.)

I think it is nice that you think people have health insurance.

I know perfectly well that there are at least 40 million people in the US without health insurance.

One might question the utility to those without health insurance of reducing respiratory diseases caused by pollution.

They should just remove becuase it seems like instead of being a silly ork stinking its tongue out people see it and think OMG SERIOUS BUSINESS.

Ahtman wrote:

lord_blackfang wrote:The fact that people think it's acceptable to stick a dollar price on destroying the environment is one of those things that keep me awake at night. It's like people don't think even a few years ahead.

Everything has a cost associated with it and the environment is no different. I don't think saying that discussing the practicality of trying to find the balance of implementing environmental policy and it's practical cost really is the same thing as people saying a big feth you to the environment. You say it keeps you up at night but how much of your money do you give to these policies? How much would you be willing to fork over willingly? Is 75% of your pay ok? 50%? 90% I mean, you do care about the environment and the rest want it destroyed so it shouldn't be a problem since you think that cost shouldn't be a factor.

I'd be willing to give all my disposable income if that was the nation-wide or, preferably, global policy. I truly and honestly would. I would give up my computer and my cell phone and Warhammer and a whole lot more if it meant that the kids I will someday have wouldn't be getting lung cancer from the air they breathe on the way to school, heavy metal poisoning from the vegetables they eat and pesticides in the water they drink.