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A Quick Economic Analysis of the EPA's Budget

Monday, February 27, 2017 8:19
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Based on the data posted here,  the EPA has had an annual nominal budget of roughly $8 billion dollars for each year from 1999 to 2016. Inflation adjusted, this does not look like Leviathan in action.  In fact, the EPA’s staffing has shrunk from its peak of 18,000 in 1999 to 15,000 recently.   Here is the main 2016 budget document for the EPA.   Based on the pie chart presented on page 29, 52% of the agency’s budget is spent on clean water infrastructure.  While this is a vague category, it provides some insights into what we will lose if President Trump sharply reduces the agency’s budget.  I do find this budget breakout to not be that user-friendly.

The economic question is simple;  The U.S now features “green cities”.  Will our cities be less “green” if President Trump enacts these cuts?  Will poorer cities bear the brunt as the Flint, Michigans will not have their water quality upgraded while Manhattan’s water will still be great?  Who bears the brunt of these cuts?  In the case of the environment, does “money matter”?  Have past investments in the EPA offered us large environmental gains?   In this evaluation of the Clean Water Act, these NBER economists say “no”.

Ideally, I would like to know;

A.  For each state in the United States, how much has the EPA invested each year in monitoring pollution and investing to upgrade infrastructure to keep the air and water clean?

B.  For each of its major programs,  Superfund, climate change mitigation, climate change adaptation, the Clean Air Act, the Clean Water Act; how much money is it spending to achieve that program’s goals and where is this money being spent? Is it being spent on labor (i. EPA employees) or capital?

With the current EPA budget document, I can’t tell which spatial jurisdictions will lose from budget cuts.  If the EPA monitoring of pollution declines, this will help areas that want to recruit dirty activity. In this early paper of mine, I found that manufacturing growth was taking place in counties that didn’t monitor air pollution. While economists look for their keys under the street light, perhaps so do the regulators!


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