Opinion: Those Nonsensical Environmentalists

 | Nov 11, 2011 | 12:20 PM EST  | Comments
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When it comes to the lack of jobs in the U.S., there are a great many structural reasons why we don't create enough of them. But what I'll focus on here is the problem of free trade, paired with environmental regulations. Taken together, I believe these two phenomena -- because of how they're implemented in the U.S. -- have ultimately destroyed jobs in the U.S., and without even reducing worldwide greenhouse gasses. In fact, those rates are now at all-time highs.

The reason for this is that, while we are reducing pollution here in the U.S. -- sacrificing our jobs in the process -- we're simply driving our production to emerging-market nations. These countries tend to have no pollution controls or, at the very least, much weaker ones than the U.S. does. They also tend to allow for super low wages and have only weak unions, if any at all. In many cases, when U.S. companies are forced to close shop due to new environmental standards, they simply import the same product from a polluting emerging-market country that increases production and pollution to mete out demand. 

What environmentalists do through the U.S. legal system and their influence in Congress, then, is to actually create greater net pollution in the world as Western workers and Western treasuries lose out. This only can work because of free-trade agreements, which have allowed the emerging markets to export the same goods back to us. As U.S. companies are forced to reduce pollution by the Environmental Protection Agency, states and environmental groups, these agreements have allowed companies to transfer U.S. jobs to the emerging world. Meanwhile, both parties seem to think free trade is the answer to all our problems -- all while the left clamors for carbon taxes and the right clamors for no pollution controls.

Luckily the U.S. was spared the 1997 Kyoto Treaty, which has helped facilitate a shift of wealth to the emerging markets. Otherwise, in my opinion, the Western world has been committing economic suicide ever that treaty was signed, and the loss of jobs has proven me correct. Companies have been continually transferring production to countries that do not have to abide by Kyoto. A recent example of this lies in Australia, which announced it will adopt a carbon tax to comply with the treaty -- in response to which the Aussie aluminum industry has said a lot of its production will now go to China, which has much lower wages and power costs.

This exemplifies the reason the U.S. refused to ratify the agreement: The treaty exempted poorer countries from complying, which -- as many U.S. senators rightly argued -- would make give them a huge competitive advantage. Since 1997, and until recently, unemployment has generally been much higher for Kyoto ratifiers than it's been in the U.S. My own position is that the U.S. should not allow the import of goods from any nation not strictly following the Kyoto treaty, and that no exceptions of any kind should be allowed for any country, including those in the emerging world.

Of course, that the U.S. demurred in Kyoto hasn't stopped environmentalists from attempting a back-door ratification of the treaty, nor has it stopped them from tying up projects that they deem harmful to the environment. One example of this was a plan to use the Mojave Desert for solar plants, which environmentalists fought on various grounds.

In another example of the destructive effects of environmental policies, a recent news report said the EPA wants to increase pollution controls on cement plants in the U.S., which might necessitate closing 30% of the industry's plants -- thus eliminating many good jobs union jobs with benefits -- since improving the plants wouldn't be economical. Reportedly, the EPA told the industry the lost production could be imported from Mexico under NAFTA from Mexico -- where, of course, the pollution controls on cement plants are far below present U.S. standards, and where workers would be paid much less. This type of transaction has been going on now for over a decade, and the jobs have disappeared as a result -- as the world's overall pollution situation has worsened.

The bottom line is that, with the way our economy is currently structured, there's no way to raise the price of energy for any reason without it affecting job creation and retention. The much-wanted taxes on carbon tax, gasoline and other fuels -- plus fact that electricity consumers are absorbing the cost of non-competitive renewable energy -- will all result in a net loss of jobs. Instead of this, I believe the government should use general tax revenue to subsidize renewable energy other than ethanol, and to refrain from passing the cost on to energy users.

Specifically, I believe natural gas exploration -- financed mostly by the private sector -- is the only industry that could quickly create a very large number of good-paying long-term jobs. Another recent report has said several home heating oil refineries on the East Coast will close this year or next because of pollution concerns, so why not postpone the closing of the refineries and keep the jobs while we extend natural gas to the East Coast from the massive new finds in Pennsylvania and Ohio? After all, the U.S. will import the heating oil to make up the difference, regardless.

Converting all buildings from heating oil to natural gas would create many jobs and would dramatically improve the air in crowded cities. The upfront costs would be big, but we could divert money from the wasteful payroll tax cuts and the extended unemployment benefits to accomplish this, notwithstanding the newly created jobs. At the same time, we could begin mandating conversion of all our surface transportation to run on natural gas. 

In addition to the improved jobs situation and cleaner air, the natural gas industry would greatly reduce the U.S. trade deficit and improve our national security. If we simply switched to natural gas from oil, the U.S. could gain energy independence that would make us much safer in a most uncertain world. Why should we wait until after Iran or Pakistan does something to interrupt the supply of OPEC oil? Why wait until our federal government is even more in debt? Is there no one in either party brave enough to promote this?

The core problem is that the U.S. has no coherent national energy policy, and no compromise between the environmentalists and those who want to gut environmental standards. The lack of compromise does not stop at Congress; it permeates U.S. society. But we can no longer afford to continue down this path, because the net result has been an export of Western pollution, money and jobs to the emerging markets as leaders pursue a "not in my backyard" policy of cleaning up air, land and water. 

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