Is Environmental Regulation Ever Good for Business?

Last Updated Jun 23, 2011 1:37 PM EDT

The next presidential election may be more than a year away, but the Republican candidates are already hard at work trying to impress the public with their economy-boosting ideas. Minnesota right winger Michele Bachmann, for example, has been pushing the idea that environmental regulation out of the EPA has been a jobs killer and should be repealed. (If you're unfamiliar with Bachmann or her stance, check out the quick video below).

Does her argument hold water? Not according to the UK's energy secretary Chris Huhne. In Britain a similar discussion is going on over whether environmental red tape puts a brake on economic growth, but Huhne is having none of this argument, insisting recently that deregulation is a terrible idea not only for the environment but also for business. And the UK Guardian is backing him up with an in-depth article that's well worth a read in full. Here's the essence of the pro-regulation argument:

Britain's businesses are not deterred from investing by environmental regulation.... Your freedom to smoke in public places takes away my freedom to avoid cancer. The freedom of a company to do what it will with its wastes takes away my freedom to bring up healthy children or live a long life. We created environmental regulation precisely to arbitrate these conflicts in the general interest.
One of the great accomplishments of the past half century has been to subjugate reckless environmental behaviours to the rule of law.... Real businesses with real customers need government to ensure two things above all with regard to environmental regulation. First, that it be predictable in its development and second, that free riders are prevented from getting unfair advantage. Deregulation defeats both. Huhne's attack on the indiscriminate drive to deregulate the environment is not just good for the environment... it is pretty good for business too.
So in essence, stable, predictable environmental regimes make a steady and fair playing field for business, while wild oscillations in policy based on who's in office or public mood add uncertainly and slow investment and growth. Are you buying it?

Also, in other counter-intuitive findings on the relationship between green policies and economic growth, Fast Company recently reported a study out of the University of Massachusetts comparing the economic effects of various infrastructure projects that found building bike lanes and other infrastructure for cyclists, "generate 46 percent more jobs than car-only road projects." Apparently, there are others like it showing green infrastructure projects offer the most bang for your buck when it comes to job creation.


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(Image courtesy of Flickr user Department for Communities and Local Government, CC 2.0)
  • Jessica Stillman On Twitter»

    Jessica lives in London where she works as a freelance writer with interests in green business and tech, management, and marketing.