The Unbearable Lightness of Regulatory Costs

Date Published: 
Wed, 02/01/2006

Frank Ackerman. Global Development and Environment Institute. February 2006. 

In his February 2006 Article for the Global Development and Environment Institute: “The Unbearable Lightness of Regulatory Costs” the Ackerman argues that contrary to conventional wisdom, regulatory costs are actually quite small and, in instances where they aren’t, reducing them would not necessarily improve economic outcomes.

He argues that if the “fabled regulations of mass destruction do exist…they should be visible for all to see”. But environmental regulations don’t kill jobs or force industries to move, because they are usually quite cheap. Ackerman cites a number of different works to substantiate his claim, including the Eban Goodstein book, The Trade-Off Myth, which demonstrates that “there is no evidence that significant numbers of jobs or businesses have ever been lost for environmental reasons.” Environmental compliance costs above 2 percent of industry revenues are exceedingly rare, while environmental and safety-regulation related plant shutdowns are responsible for 0.01 percent of job losses.