HOLLENBERG: Deregulation has gone too far

March 2, 2013

HollenbergAs an environmental policy analyst, the governor’s ordering of a moratorium on environmental regulation concerns me. It should also concern Indiana residents and businesses.

Deregulation mania should be viewed critically and from a long-term perspective. Not only has environmental regulation reduced health risks in Indiana over the last 30 years, it also promotes social benefits, which ultimately benefit business.

Obviously, there is a direct connection between a clean environment and human health. Who can argue that breathing smog and noxious fumes will have no effect on our health? Who wants to drink water laced with arsenic and mercury?

Indiana now works diligently at maintaining cleaner air and cleaner water, likely due to environmental regulation. History has shown that industry will not clean up its act on its own. It needs prodding.

The clear winners of environmental regulation are the citizens who enjoy reduced risks of myriad health hazards. Often-overlooked winners, however, are Indiana businesses.

A healthy work force is a productive work force. Illness is expensive in terms of time lost to productivity and money spent on health plans. A 2005 survey of small businesses reported that illness reduces productivity in the United States to approximately half capacity. For Indiana, this represents a loss of $2.6 billion for 2010 alone. And the more claims on health insurance, the more expensive it gets.

Beyond protecting human health, environmental regulation’s secondary goal is to protect the environment itself. But why should businesses—that exist to make a profit—care about protecting the environment?

First, dirty environments degrade equipment and property. Some air pollutants also interfere with pollinating insects, inducing a loss of agricultural productivity. Dirty environments also are a disincentive for locating a business, leading to an economic opportunity cost.

Does regulation stifle innovation, as is often argued? A cross-industry literature review finds that, in some industries, environmental regulation actually stimulates innovation. And although environmental regulation isn’t always good for innovation, it isn’t always bad, either. It all depends on how the policy is crafted.

Some environmental regulation has led to the concept of sustainability, which takes a very-long-term look at what is good for a company or an organization. Long-term planning now means a lifetime or more, rather than 10 or 20 years. Will the entity be able to survive that long, given its present practices and use of resources?

Sustainability weds environmental and economic concerns. Companies concerned with sustainability try to reduce their waste, knowing that waste is really just wasted resources.

Further, they try to create as little mess as possible, knowing they will have to clean it up some day and that the cleanup will be costly.

Finally, they use resources responsibly, so they can count on a reliable (and affordable) supply in the future. Sustainable businesses have a competitive edge, but only if environmental regulation levels the playing field.

It’s time to get off the deregulation bandwagon and look at whether specific regulations make sense. As our planet grows from the current 7 billion people to a predicted 10 billion by the end of the century, we need to recognize that this is not the time for moratoria on regulations.

Indeed, it is a time to make our regulations work for the good of the planet and its people.•


Hollenberg, an environmental policy analyst living in New Mexico, is an Indiana native who taught chemistry in Fort Wayne. Send comments on this column to ibjedit@ibj.com.

Comments powered by Disqus