President Donald Trump has announced that he will work to roll back environmental laws and regulations with the hope of improving the U.S. economy and standard of living. We feel compelled to report that such an attempt is likely to backfire.
Environmental regulations have provided enormous benefits to U.S. citizens and have positioned American businesses to lead in markets, including those in China, where environmental concerns are growing. If President Trump wants to help Americans, he should not concede U.S. leadership and direct a retreat to the position of a laggard country. Rather, he should strengthen the United States' position as a leader and inspire others to follow.
We are not blind to the existence of some burdensome and ineffective environmental regulations, and we recognize the need for some reassessment. For the most part, however, the benefit of existing regulations has far exceeded the cost. The nonpartisan federal Office of Management and Budget has calculated that the rules imposed by the U.S. Environmental Protection Agency (EPA) over the decade ending 2012 yielded benefits 10 times their costs--a ratio better than all of the other federal agencies they reviewed.
U.S. environmental laws have helped restore areas from Pittsburgh to Puget Sound, enabling commerce and recreation to thrive in places that had previously been unhealthy or dangerous. Reports done under the authority of the Clean Air Act, which requires the EPA to calculate the impact of the law on public health, the economy and the environment, have concluded that environmental laws have prevented hundreds of thousands of premature deaths and millions of lost work days.
These and other benefits exceed the costs occurred by a ratio of benefits-to-costs ranging from 3 to 1 to as much as 90 to 1. Many other studies conducted by academics, nonprofits and government agencies have also found that the benefits of many federal environmental regulations far exceed their costs.
President Trump took office at a critical time for dealing with the worldwide challenge of climate change. His administration will cover a span of years where action is critical, though the most severe effects of rising greenhouse gas levels have not yet appeared. We urge our new president to demonstrate to the world the foresight and courage for which American presidents of both political parties have been praised in the past.
Action now on climate change can also provide a boon to the U.S. economy. American businesses are poised to be winners in the transition to a low-carbon economy. They lead the world in the development of critical technologies related to nuclear energy, renewable power, energy efficiency, storage and transmission. In fact, several U.S. companies have endorsed a proposed extension of the Montreal Protocol to regulate hydrofluorocarbons and protect the ozone layer of the atmosphere precisely because it will create new business opportunities for their products around the world.
Environmental regulation is sometimes castigated as a partisan affair driven by the political "left". The reality is that most environmental regulations are consistent with conservative values such as fair-play and market competition. Regulations ensure that everyone contributes their fair share. As Harvard economist Gernot Wagner recently observed, "If you care about well-functioning, free markets, the EPA would be the last federal agency you'd want to cut."
We urge President Trump to take three critical steps to support U.S. business and protect our common environment. First, he should maintain this country's commitments to the Paris Agreement on Climate Change and continue American leadership in international efforts to mitigate climate change. Second, he should stand by and implement the U.S. EPA's Clean Power Plan, a science-based approach to deliver on the nation's commitment to reduce its contribution to climate change. Third, he should create a clear and transparent plan for future actions to provide confidence in the value of investments needed to develop next-generation technologies.
Finally, we urge President Trump to support actions to protect the world's environment. Almost 50 years ago, President Richard Nixon recognized that he had an opportunity to resolve conflicts with China and the then-Soviet Union. And more than a century earlier, President Theodore Roosevelt had the foresight to preserve America's greatest natural treasures by laying the foundation for the U.S. National Park System. We believe that President Trump is now in a similar position to that of his Republican predecessors.
We hope he realizes the chance he has to help Americans and the world create a thriving economy that safeguards the world's natural resources.
Andrew A. King is a professor of business administration at the Tuck School of Business at Dartmouth. Michael W. Toffel is a professor of environmental management at Harvard Business School. This article is endorsed by the following business school professors, all of whom are founders or board members of the Alliance for Research on Corporate Sustainability (ARCS), a partnership among academic institutions that facilitates research on corporate sustainability. Endorsement of this article represents each individual's view and not necessarily that of their university or of ARCS.
Vanessa Burbano, Columbia Business School, Columbia University
Marian Chertow, Yale School of Forestry and Environmental Studies and Yale School of Management
Magali Delmas, University of California, Los Angeles
Glen Dowell, Samuel Curtis Johnson Graduate School of Management, Cornell
Rodolphe Durand, HEC Paris
Andrew J. Hoffman, Ross School of Business, University of Michigan
Guy Holburn, Ivey Business School, Western University
Andrew A. King, Tuck School of Business at Dartmouth
Michael Lenox, Darden School of Business University of Virginia
Lin Lerpold, Stockholm School of Economics
Thomas Lyon, Ross School of Business, University of Michigan
John W. Maxwell, Kelley School of Business, Indiana University
Eric W. Orts, The Wharton School, University of Pennsylvania
N. Craig Smith, INSEAD
John Sterman, Sloan School of Management, Massachusetts Institute of Technology
Michael W. Toffel, Harvard Business School, Harvard University
L. Beril Toktay, Scheller College of Business, Georgia Institute of Technology
David Vogel, Haas School of Business, University of California, Berkeley
Judith Walls, Nanyang Technological University
Frank Wijen, Rotterdam School of Management, Erasmus University Rotterdam
Jeff York, Leeds School of Business, University of Colorado at Boulder
Maurizio Zollo, Bocconi University
This piece was originally published on THE HILL.com on 1/23/17: http://www.thehill.com/blogs/pundits-blog/energy-environment/315692-trumps-last-chance-to-save-our-environment