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Investing in Clean Air: Great Returns
If I told you about an investment opportunity where you could receive 30 times the amount invested each year over the course of thirty years, I bet you would jump at it. Such an investment return would blow away virtually anything you could find in the stock market. In comparison, over the last twenty years, the three major stock indexes have only grown roughly 4 times since 1990. It also raises the question of why some politicians continue to target our nation’s investment in reducing air pollution. Recent Congressional efforts attacking the Clean Air Act amount to a collective turning of the nose to a proven version of my aforementioned investment opportunity.
Today, the Environmental Protection Agency (EPA) released a report that would make most Wall Street traders salivate.
After comparing investments in reducing air pollution to the returns generated over the last 30 years, EPA found that the economy as a whole is far better off that it would have been without the Clean Air Act programs. For the first time, this study looks at a broader set of economic benefits resulting from the Act, including how the law has reduced household medical expenses and led to fewer lost work days. The report provides the most complete picture to date on how reducing air pollution affects our overall economic well-being.
Specifically, the analysis found:
- Annual economic benefits ($2 trillion) of the Clean Air Act’s programs outweigh the costs ($65 billion) more than 30 to 1.
- Clean Air Act programs have saved lives and resulted in significant improvements to public health (including diseases such as asthma that lead to lost productivity) and the environment (such as improved visibility, reduced acid rain, and increased agricultural production).
- Investments in clean air have reduced six major pollutants 63%, while private sector jobs have increased 86% and overall GDP has increased 204%.
As compelling as these and the other results outlined in the report are, it is likely that the Agency still has underestimated the benefits of the Clean Air Act’s pollution reduction programs. While we know that the Clean Air Act has greatly benefited wildlife over its 40-year history, the value to our economy from the Act’s protection of “ecosystem services” is still difficult to quantify. EPA’s analysis covers some of these issues, such as improved agricultural production and a limited analysis of recreational fishing, but the study does not even capture the full range of environmental benefits garnered from the Act. For example, the positive economic impacts on recreation from healthier forests and improved water quality could not be fully assessed. As a result, it is clear that the return on investment from the Clean Air Act highlighted today, while extremely impressive, is still far greater than the study indicates.
Opponents seeking to derail EPA’s continuing success story and efforts to update our pollution standards to address mercury, carbon dioxide, and other pollutants are clearly on the wrong side of the economic debate. The Clean Air Act’s history tells a very different story and today’s new economic analysis firmly rejects the notion that dirty air, polluted water, and contaminated fish are necessary in order for our economy to prosper. Investing in clean air is hands down one of the smartest investments we can make for the health of our economy. It is time for Congress to get out of the way and allow EPA to do its job – we cannot afford not to.
