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Employment effects of coal ash regulation

Policy white paper

Author(s): Ackerman, F.
Year: 2011

The U.S. Environmental Protection Agency is considering regulation to protect the public from the health hazards of coal ash disposal. In response, an industry group has claimed that strict regulation of ash disposal could lead to the loss of more than 300,000 jobs.

This analysis shows fundamental flaws in that claim – most notably, that it provides no explanation for more than 50,000 of the supposedly lost jobs, and that the majority of the claimed job loss, said to be the result of a 1-percent increase in electricity prices, is based on misuse of an estimate in an unpublished academic paper.

The author also presents a new analysis of employment effects, based on an industry estimate of the costs of regulation that is much higher than the EPA's cost calculation, and the well-known IMPLAN model of the U.S. economy.

The analysis shows that new spending required for compliance with strict regulation of coal ash, including expenditures for waste management, wastewater treatment, and construction and operation of facilities and equipment, combined with the effects of the resulting electricity rate increases, would result in a net gain of 28,000 jobs.

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