Extensive environmental regulations have brought cleaner air and
health improvements to the U.S., but they also have increased
the cost of manufacturing and reduced industrial productivity,
according to a study by economists at the Univ. of Chicago and
MIT. Some economists have suggested that the regulations
encouraged companies to become more efficient, thus reducing
costs at upgraded plants. But in a paper published by the
National Bureau of Economic Research, three economists contend
that the regulations led to a 4.8 percent decline in
productivity and reduced profits by nearly 9 percent from
1972-93. The annual cost to companies was about $21 billion,
according to the paper, “The Effects of Environmental
Regulations on the Competitiveness of U.S. Manufacturing,” by
Michael Greenstone, a professor of environmental economics at
MIT, John List, a professor of economics at the Univ. of
Chicago, and Chad Syverson, professor at the Univ. of Chicago
Booth School of Business. “There are good reasons to think envi