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Costs, Benefits, and Unintended Consequences: Environmental Law and Deindustrialization

Discovering truths hidden in plain sight may be the single greatest challenge in this era of information oversupply, but here’s a try: America’s environment is the cleanest it has ever been in our lifetime—and perhaps several lifetimes.

This statement should come as no surprise, given our country’s decades-long focus on making the environment cleaner. Yet mentioning aloud this relative absence of industrial pollution would elicit only blank stares from a public accustomed to talk of an environmental apocalypse lurking around every corner.

In fact, the United States has been able to significantly improve in almost every environmental metric in the past half century. Air pollu­tion fell by an incredible 77 percent between 1970 and 2019, adding more than two years to the collective lifespan of all Americans, while lead pollution has fallen 98 percent since 1990.1Asbestos, lead-based paint, and hundreds of other hazardous chemicals have been largely banned from the eco­system, and America’s most polluted places are now quarantined within Environmental Protection Agency (EPA) Superfund sites or highly reg­ulated Areas of Concern. But these suc­cesses receive no credit during the perpetual fights over wealth and power in Washington.

At the same time, we forget that in the last fifty years, environmental regulation has contributed significantly to the redistribution of re­sources away from the real, physical world and into cyberspace—away from labor unions and skilled labor and into unregulated algorithmic code. Between 2000 and 2014, the United States lost over seventy-five thousand manufacturing “establishments”—economist-speak for facto­ries—with much of the blame falling on competition from China.2

China also happens to be a classic “pollution haven”—a jurisdiction where global firms build their manufacturing plants to avoid the higher costs associated with more stringent regulations in their home countries. In other words, U.S. trade and environmental policy played a significant role in moving manufacturing from the United States to China, not simply cheaper labor costs.

This economic disruption has resulted in growing social disruption. The median income of men without a secondary-school diploma fell by 20 percent between 1990 and 2013, and it hasn’t risen much in the past eight years. For men with a high-school diploma but without college degrees, median income fell by 13 percent. The decline in U.S. manufacturing—traditionally a primary route to the middle class—has been hitting these groups particularly hard for decades.

Research from Anne Case and Angus Deaton’s 2020 book Deaths of Despair and the Future of Capitalism highlights the linkage between wage stagnation, weak labor force participation, and increased mortality for the working class compared to those with four-year degrees. A clearer case of elite inattention to working-class challenges is difficult to find. Both labor force participation and wages have been falling at the same time for decades—a historical anomaly—leading Deaton to argue that “it’s very hard to conclude anything except that it’s the supply of jobs that has gone wrong, and there’s simply less and less work for less skilled people.”3

Isn’t it time to develop a fairer economy for all in the twenty-first century? One that can revitalize the American experiment, and eco­nomic growth, in a fundamental way, rather than the dystopian visions that our corporate and political elites seem to believe is our only future. Can the United States rebuild an economy that works for the working and aspiring middle classes while keeping America’s environment clean?

“A Hazard We Ourselves Have Introduced”

The post–World War II economic boom saw the rapid commercialization of extraordinary industrial inventions resulting from wartime innovation. But it came too quickly for the environment. There was not enough time for a plodding, procedural legal system to connect cause and effect—or harm and restitution—with respect to industrial pollution and the health damages created by this pollution.

“Only yesterday mankind lived in fear of the scourges of smallpox, cholera, and plague that once swept nations before them. . . . Today we are concerned with a different kind of hazard that lurks in our environment—a hazard we ourselves have introduced into our world.” Thus wrote biologist Rachel Carson in her consequential 1962 book Silent Spring. Carson catalyzed the environmental movement by demonstrating how unregulated industrialization had resulted in serious ecological damage and dire public health costs. She explained, in vivid terms, how the cost of pollution was being borne not by the energy and chemical companies creating the pollution, but adversely affecting public health.

The evidence of environmental damage soon became overwhelming. Burning rivers in Cleveland and oil spills on the beaches of Santa Barbara weren’t the half of it. By the end of the 1960s, more than 40 percent of public water systems across the country couldn’t meet the most minimal health standards.4 More than sixty metropolitan areas in the United States suffered from serious air quality problems, with pollution from industries in towns like Steubenville, Ohio, and Wichita, Kansas, cutting at least four, and sometimes five, years off the length of residents’ lives.5 Weeklong smog events in New York City became commonplace, with a single smog event in 1966 killing three hundred people.6 Something had to be done.

The Clean Air Act was signed by President Nixon on the last day of 1970. It was followed by the Clean Water Act in 1972 and the Endangered Species Act in 1973. All this legislation was inspired by a revolutionary legal concept introduced by the federal courts in the 1960s. Clean Air, in particular, incorporated into statute what had only been imagined previously—namely, that economic actors must reduce poten­tial hazards before strong proof of harm is evident. This rule is commonly known as the “precautionary principle.”

The Clean Air Act created health-based standards for emissions of lead, ozone, carbon monoxide, sulfur dioxide, nitrogen oxide, and par­ticulate matter that, when exceeded, were presumed harmful for human health and the environment. This reversal of the burden of proof was expanded in the 1990 Clean Air Amendments to include more than 180 additional pollutants.7

The decision to preempt economic behavior by law was one of the most radical departures from established legal norms concerning private property in American history. Since then, the unintended consequences of these statutes have intensified, in part because the implications of the precautionary principle are in direct opposition to the cost-benefit directives also written into modern environmental law.

The adoption of a bias toward “erring on the side of caution” on the part of federal bureaucracies, even in cases where the scientific basis is not legally compelling, has permanently changed the shape of the Amer­ican economy. The precautionary principle has moved the U.S. econ­omy away from experimentation with physical goods, undermining the creation of tacit knowledge that has been the hallmark of the American work experience.8

As explained by former Obama regulatory czar Cass Sunstein, if the precautionary principle prohibits actions that present only plausible risks to health, safety, or the environment, then the principle itself is paralyzing. This paralysis potentially prohibits all actions, including the decision not to regulate a behavior at all.9

Sunstein gives many examples of this paralysis: threats of global warming, nuclear power, antibiotics, airplane safety, and genetically modified organisms (GMOs). Any strong application of the precautionary principle lacks utility as long as the technology or activity creates both benefits and risks.10

Environmentalism and Legal Standing

Even before the precautionary principle was codified, appellate court judges took a separate legal innovation in civil rights law and grafted it onto what became modern environmental law—to harmful effect.

The change began with the best of intensions. Two major U.S. Supreme Court cases in the 1950s, Barrows v. Jackson (1953) and Naacp v. Alabama (1958), expanded the concept of standing to give individuals or groups permission to vindicate the constitutional rights of third parties unable to do so due to threats of racial violence in the South. In Naacp v. Alabama, the Supreme Court reversed a lower court ruling requiring that the naacp divulge its membership lists, giving rise to new legal terms like “organizational standing” and “vicarious standing,” both of which now allow third parties the ability to defend the rights of non-litigants.

A plaintiff must have legal standing before any case filed can proceed, and when cabined to the civil rights context, especially during the era of Jim Crow, this move was a laudable one. But federal appellate courts’ later decision to broaden the doctrine of third-party standing to environmental law changed the entire long-term investment outlook for capital-intensive industries.

In December 1965, the Second Circuit Court of Appeals in New York found that the Scenic Hudson Preservation Conference—an amalgam of environmental activists—had legal standing to sue the Federal Power Commission to stop the building of a hydropower facility north of New York City. Citing injury to “aesthetic or recreational values,” the Second Circuit expanded the existing judicial defini­tion of standing to cover the plaintiffs, making it the first time a court recognized the right to bring an environmental dispute that did not relate to a health or financial injury.

By the late 1960s, in the wake of the Santa Barbara oil spill and the Cuyahoga River Fire in Cleveland, modern environmentalism had become one of the animating spirits of the age. The most important procedural legislation in U.S. administrative law history, the National Environmental Protection Act (NEPA), was signed on December 31, 1970. NEPA incorporated the appellate court’s language in support of “aesthetically and culturally pleasing surroundings” and thus gave statutory embodiment to the environmental ethos unleashed by Scenic Hudson Preservation Conference v. Federal Power Commission.

The NEPA law did not itself envision linking an expanded “injury-in‑fact” standing test to include “culturally (dis)pleasing” behavior; it was linked by later court decisions. First, in Calvert Cliffs Coordinating Comm. v. AEC (D.C. Cir. 1971), a federal appeals court recognized the power of courts to review federal NEPA compliance even in the absence of any agency-level regulation. This decision mandated completion of a lengthy environmental impact statement (EIS) and was the first to com­bine “aesthetic/recreational values” with expanded third-party standing.

The next year, the U.S. Supreme Court found in Sierra Club v. Morton (1972) that injury to a citizen’s interest in the environment was sufficient to confer legal standing to sue. Later, Congress enacted the Equal Access to Justice Act in 1981, bolstering citizen litigation under NEPA by greatly expanding the scope under which attorney fees can be awarded to nonprofit groups that challenge government actions.

Asymmetric Legal Warfare

In the forty years since the Equal Access to Justice Act became law, the investment environment to build any type of extractive or industrial project has been punishing to say the least. More than four thousand lawsuits have been filed in federal court alleging violations of NEPA and related regulations largely to delay or kill new projects.11 These lawsuits are now the preferred political tactic of the environmental Left, with little or no legal recourse available in response, since the Equal Access Act protects these lawsuits from being deemed “frivolous.” It’s no surprise investment banks and companies look overseas for investment opportunities in the face of such asymmetrical legal warfare.

The White House office that handles NEPA reviews, the Council on Environmental Quality (CEQ), anticipated in 1981 that federal agencies would be able to complete most EISs in twelve months or less. But thanks to intervening judicial decisions via third-party litigation, the average government-wide preparation time for an EIS by 2006 had grown to 3.4 years.12 By 2010, the average government-wide completion time became 4.2 years, and by 2016, the average had grown to over five years.13 This means that the average amount of time needed to get permission to build a project is now longer than the total time it took—from start to finish—to build the Hoover Dam or the Golden Gate Bridge.

For noneconomists, such delays may seem a bit unfortunate, and little more. For those who understand the time value of money and the functioning of discount rates, however, it’s easy to understand how projects with a 25 percent rate of return can become projects with a 19 percent rate of return with a delay of only two years, 15 percent after four years, and so on.

By purposefully extending the legal risk for investment capital, the corpus of environmental law has created a legal phenomenon for which there is not yet a word: “indirect-takings,” “future tangible assets takings,” or “opportunity-cost takings” have no established meaning in the English language, and therefore pose no qualifying test within the U.S. legal system.

Yet this behavior has likely cost trillions of dollars in investment and hundreds of billions in working-class wages over the decades, with few direct political ramifications. LNG import and export plants, steel mills, and oil refinery investment have all been disincentivized, along with ammonia plants, shipyards, metal smelters, and lumber mills. Some of these industries pollute more than others, but these industries, when based in the United States, pollute less than industries in “pollution havens” elsewhere. There are major differences in the value of industries to society in terms of national security and working-class household wealth, yet no distinctions are made under current environmental law. These differences were historically arbitrated in a democracy through electoral politics, but that is no longer the case.

Examples abound showing an asymmetrical environmental law sys­tem slowly poisoning economic development and working-class job creation. In June 2019, Texas-based LNG developer NextDecade com­plained that the Sierra Club was abusing the rules when the environmental group challenged the Federal Energy Regulatory Commission (FERC) to reconsider a federal permit given to the company’s proposed Rio Grande LNG terminal at the Port of Brownsville, Texas. NextDecade argued that the permit had already gone through a “robust four-year regulatory review” and didn’t need any further consideration.14 FERC denied the request by the Sierra Club in November 2019, but the environmental organization appealed the decision to the D.C. Circuit Court of Appeals in March 2020, putting the project in limbo. The appeal took seventeen months to decide. On August 4, 2021, the court said FERC must reconsider the climate and environmental justice im­pacts of the terminal before reviving the permit.15

Now that FERC is under Biden administration control, it will likely take more than a year for a new environmental impact statement to be completed. The agency will likely also add strict climate emissions standards as a condition of constructing the plant.

Meanwhile, the projected creation of up to five thousand temporary construction jobs and 250 permanent jobs will be delayed into at least 2023, in a heavily Hispanic county with higher-than-average poverty and unemployment rates, more than seven years after the company first applied for its LNG export license. Chances are high NextDecade will simply cancel its Rio Grande project all together, given the roadblocks now placed in its path.

It is also worth noting that the Sierra Club’s legal position has nothing to do with making the air around Brownsville, Texas, cleaner. Instead, it has slowed development of technologies to better capture carbon emissions from heavy industry. A main element of Rio Grande LNG’s business model is to capture up to 90 percent of its carbon emissions, amounting to more than five million tons of carbon dioxide a year. Rio Grande LNG would be the first LNG project with this level of emissions capture.16

Similar disincentives are at work in other heavy industries, such as crude oil refining. America has not seen a new greenfield refinery built since 1977 because of slow siting, ever-tightening air quality standards, and similar “spoiler” lawsuits. A proposed 150,000 barrel per day refinery in Arizona remained stuck for nearly fifteen years in state and federal permitting processes before the market changed and investment went elsewhere.17 The refining industry has found workarounds to these permit problems by expanding capacity within the fence lines of existing facilities, but not all sectors have the same options. Current rules make new greenfield construction largely impossible for many industries.

In April 2021, U.S. Steel canceled plans to spend $1.5 billion to upgrade its massive Mon Valley Works outside of Pittsburgh to make lightweight steel for the U.S. auto industry.18 These upgrades would have installed new technology to cut air pollution at three main steel plants—the Edgar Thomson Works, the Irvin Plant, and the Clairton Coke Works. As a result of the cancellation, Pennsylvanians lost what would have been a transformative (and environmentally friendly) in­vestment—and the thousand manufacturing jobs that would have come with it.

The Mon Valley decision is a classic example of the multilayered political challenges for industries that create manufacturing jobs. A seemingly routine but practically unobtainable Allegheny County emissions permit kept U.S. Steel from installing the new technology for several years.19 It is also worth noting that U.S. Steel joined an industry group targeting net-zero carbon emission by 2050, and referenced the Paris Agreement (which the Biden administration rejoined in January 2021) in its press release, less than two weeks before canceling the Mon Valley investment.20

While these three cases are just a few examples of the four thousand NEPA lawsuits filed to obstruct large industrial projects, it is impossible to account for the perhaps much larger number of projects that were not even attempted in the first place because of environmental obstacles. What is more remarkable still is how all this disinvestment takes place in spite of the drop in pollution levels since the early 1970s: by some estimates, U.S. pollution has fallen to levels last seen in the mid-nineteenth century.21

Possible Adverse Effects

The nature of environmental regulation can get technical fast, but much can be explained by understanding the influence of one economic term and the political fight over its use in regulation: cost-benefit analysis. Put simply, cost-benefit analysis is a systematic approach to estimate the strengths and weaknesses of alternatives to a regulatory status quo. The analysis is typically expressed in monetary terms, with adjustments made for the time value of money.

The U.S. Securities and Exchange Commission and the U.S. Food and Drug Administration assess all costs and benefits associated with a given regulation without much controversy. But with environmental regulation, political differences over interpretations of direct versus indirect costs (and direct versus indirect benefits, known as co-benefits) reign supreme.

Cost-benefit analysis has been on the books since the 1970s, albeit with too much ambiguity to keep disputes over its meaning out of federal courts. For instance, there are more than forty sections or subsections where, according to the Congressional Research Service, costs are either “identified explicitly or implied” as a factor to be considered within the Clean Air Act alone.22

Such “implied” language is a nightmare for rulemaking. A directive at the beginning of the Clinton administration, Executive Order 12866, improved the situation somewhat, mandating estimates of costs and benefits for “economically significant” regulations, though this order was not enforced consistently. It was not until the Trump administration published two executive orders in early 2017 that a comprehensive cost-benefit analysis rule for the Clean Air Act and other environmental regulation was finally put forward.

The biggest issue for policymakers was the question of co-benefits to specific regulations. The Obama administration was able to show enormous co-benefits for its 2011 Mercury Rule as a result of cuts to particulate matter which was incidental to mercury regulation.23 In response, the Trump administration argued that the co-benefits from particulate matter cuts were essentially “double-counted,” since they are already accounted for in other Clean Air Act–related rules.

In an effort to resolve this disagreement, in December 2020 EPA published a final rule ordering the agency to: (1) identify the problem a proposed rule is supposed to address and explain why market forces can’t do the job; (2) show options not chosen and explain why; and (3) break out expected health gains from pollution reductions directly targeted by the planned regulation and other indirect “co-benefits.”

Unsurprisingly, President Biden froze implementation of this rule during his first afternoon in office, signifying the centrality of the meaning of cost-benefit to environmental regulation. In May, EPA administrator Michael Regan formally rescinded the entire rule, calling it “unnecessary.”

Regardless of the status of this particular rule, deep inconsistences at the core of environmental regulation remain unresolved. Much of the problem can be linked to the comparative ease of measuring the direct health benefits of lower pollution compared to the indirect costs of lower economic growth, job destruction, and wage deflation on the American work force.

The EPA acknowledged this disconnect between the measurement of indirect costs and direct benefits in a 1997 report to Congress. The agency published a median estimate of total monetized benefits to society from the Clean Air Act: $22.2 trillion in 1990 dollars, compared to the cumulative cost of $523 billion, a ratio of roughly forty to one in gains to losses. This cost, however, does not include several potentially important indirect costs that cannot be readily quantified, such as the possible adverse effects of Clean Air Act implementation on “capital formation and technological innovation.”24

This is a glaring omission by EPA that has not been fixed in the two-plus decades since it was made. In some sense, this admission is a “smoking gun” of analytical malfeasance, since “capital formation and technological innovation” are the essential means by which the modern world improves human well-being. Without capital formation and technological innovation over the past three hundred years, there would be no gains in the welfare of humanity worth measuring.

The finding of $22.2 trillion in benefits also relies on definitional sleight of hand within the study, with the “total monetized benefits” being compared directly with the value of “direct compliance expenditures.”25 This accounting adds up the cumulative impact of benefits over time, but does not do the same for the indirect accumulated societal costs. Excluding harder-to-quantify indirect costs just because they “could not be readily quantified” is not a standard economists should be proud to meet.26 In fact, it borders on professional malpractice: there is more than enough research pointing to major dislocations in the U.S. job market caused by poorly balanced environmental regulation. The total costs represent potentially trillions of dollars in lost wages, income, and tax revenue over the past several decades.

In particular, the types of “irreversible” investments that are especially prone to influence by environmental regulation include those involving most craft and construction labor: the building of office and industrial buildings, specialized machinery, electrical equipment, air­craft, and farm buildings and equipment.27 Put in starker terms, the federal government has never accounted for the cumulative health and social effects of economic disruption caused over time by environmental regulation, while repeatedly estimating and emphasizing the cumulative health benefits of the selfsame regulations.

Taking these negative consequences into account would likely have uncovered the growing threat of the “deaths of despair” phenomenon well before Case and Deaton’s research. This research found in 2015 that working-class white men and women (without four-year degrees) were dying from suicide, drug overdoses, and alcohol-related liver disease at unprecedented rates, but with no obvious root cause. These rates grew from roughly 69,000 people per year in the mid-1990s to 158,000 people by 2017, driven almost entirely by deaths among non-Hispanic whites without four-year degrees.28 A broader analysis of indirect costs likely would have discovered regulation-related links to the decrease in marriage rates, the increase in out-of-wedlock births among lower-income households, and the deterioration of social capital occurring in working-class households over the past several decades.

The EPA has successfully argued that it is legally protected from considering costs when setting air health standards, pointing out that Section 109 of the Clean Air Act prohibits such considerations. This interpretation was affirmed by a unanimous Supreme Court decision, Whitman v. American Trucking Associations in 2001.29 This decision has allowed the government to take a skewed position that is only legally—but not substantively—defensible. There is, of course, a connection between environmental regulation, industrial jobs, and human well-being, derived from the wages those jobs pay, in the same way that there is a connection between lower air pollution and better health.

A number of studies have shown that declining productivity in key polluting industries is a clear result of pollution-abatement spending. One 2003 study of sixty-eight pulp and paper mills, fifty-five oil refineries, and twenty-seven steel mills found that a $1 increase in pollution abatement led to productivity declines of $3.11, $1.80, and $5.98 in these facilities, respectively.30 Industries that experience the most increases in costs from pollution controls also see the largest increases in net imports—an excellent proxy for domestic factory closings and industry-specific job losses. A study from 2008 examining the United States and Mexico found that changes to net imports ascribed to regulatory costs accounted for 10 percent of the total increase in trade volume between 1977 and 1986, and this notably occurred before nafta.31

These figures show that the investment disincentives and uncertainty that environmental regulations create—the opportunity costs, the fines and criminal charges for accidental noncompliance, the yearslong per­mitting delays that freeze investment capital—are real.32 Historically, federal regulation only tightens rules, and absent a compensatory trade policy—which can only be adopted at the federal level—net imports for an industrial sector must increase by necessity as domestic demand is no longer served by domestic production.

As domestic investment in pollution-heavy industry declined, the investment didn’t just disappear. Instead, it was transferred either to Silicon Valley or Wall Street, which supplied high returns and income seemingly unconnected from the polluting parts of the economy, or investment shifted overseas to pollution havens. Many academic studies show that the proliferation of pollution havens outside the United States has occurred at a rapid pace in recent decades.33

While justified on health grounds during the first decades after enactment, the landmark environmental statutes are now subject to the law of diminishing returns as pollution levels fall toward zero for many hazardous substances. Meanwhile, beginning in the 1970s, the offshoring or elimination of manufacturing jobs, unintentionally exacerbated by the evolution of environmental law, has undermined the social stability and economic mobility of the working-class and lower-income households.


There has been no more tangible expression of the American Dream than the historic elevation of the industrial working class into the middle class, a process that had been premised on the traditional civic ideal of upward mobility through work. The loss of the kinds of jobs that made this achievement possible is now just as tangible and poignant, especially in those regions of the country where the imprint of industry was strongest, and where the destructive role of environmental regulation is most evident.

The cancellation of U.S. Steel’s Mon Valley investment in April 2021 is particularly symbolic, given that a statue of Joe Magarac, the fictional, eastern European–American folk hero, currently stands in front of the Edgar Thomson Works in Braddock, Pennsylvania. Magarac is a fas­cinating character, created near the end of America’s tall-tale literary tradition that spawned legends like lumberjack Paul Bunyan and John Henry, an African American, sledgehammer-wielding, “steel‑driving man.” According to legend, Magarac was born under an ore mountain, bent steel with his bare hands, and could work twenty-four hours a day indefinitely. Developed as an example of immigrant patriotism and cultural assimilation, Magarac’s story was viewed with pride by the hundreds of thousands of eastern European immigrants and their descendants working in and around the steel and coal industries in the nineteenth and early twentieth centuries.

There are great costs to the eradication of this vision of upward mobility. The deindustrialization of America and much of the West has provoked a powerful response in the U.S. electorate, and among electorates beyond our shores. Brexit, the Tea Party, the Yellow Vest protests in France, Occupy Wall Street, the BLM and MAGA movements all took place in societies reacting to a relentless, decades-long push for deindustrialization that has no end in sight.

The seeds of this strife were sown well before the global financial crisis of 2008. The social unrest that washed over America in the 2010s arguably had its roots in the constitutional, social, and legal changes made during the dozen-year period between 1963 and 1975. Among these, the legal revolution in environmental law has had an increasingly adverse, if subterranean, influence on the U.S. economy and legal culture, yet its impact has been memory-holed by elite conventional wisdom.

Because the effect of regulation on the country’s economy is cumulative, and because this accumulation is not properly accounted for by the federal government, there is a limited amount of proper analysis on which to base effective political remedies. What is clear are the negative consequences arising from this lack of accountability. What was available to the Magaracs in the U.S. workforce was shut down, just as full legal equality in the workplace was finally given to America’s John Henrys. The destruction of the social contract between classes in the United States is not yet complete, but the terrible irony of this coincidence—of environmental law helping to undermine the economic goals of the civil rights movement—is now etched like an unfashionable tattoo onto the face of the American experiment.

“Learn to Code”

A common social media response to a modern-day Joe Magarac, navigating the twenty-first-century job market, is that he should “learn to code.” There are great costs to this dismissiveness. For the John Henrys of the twenty-first century—working-class black men without a college diploma, struggling with poor wage-earning prospects—the re­sponse is equally as dismissive and ultimately self-defeating. Systemic racism is the easy answer to these struggles, with no real analysis of what an economy filled with well-paying, value-adding jobs would look like and how the U.S. economy could get there. Nor does racism explain how “deaths of despair” spread among the white working class.

But the metaphor of John Henry is as emotionally stirring today as it has ever been. Acting as a working-class hero for economic nationalists, socialists, and social justice warriors alike, this semilegendary figure exemplifies how dignity and physical courage can endure in the face of corporations, state power, and the dark side of technological innovation.

It also helps that John Henry was likely a real man, not a literary fiction, living and working in the 1860s and ’70s in West Virginia, digging tunnels for the Chesapeake & Ohio Railroad. Petty theft motivated by hunger likely sent him to prison, until a prison warden realized there were too many nonviolent offenders in the system (a sad example of history repeating itself) and hired him and hundreds of other prisoners out to the railroad.34

John Henry didn’t give his life to prove he could beat a steam engine; he likely died of workplace pollution—silicosis—the fast-moving lung disease that killed many railroad workers during this time period.35 This is, of course, the exact type of human health effect that Rachel Carson warned Americans about almost a century later. To take the full measure of social progress in the intervening years is to recognize how unfair the work system was to John Henry in the 1870s, and that such behavior would be both illegal and subject to social condemnation in the United States today.

In the past, the “hazards we ourselves introduced” included capri­cious capitalism, unregulated pollution, and institutionalized racism. Now, the hazards we introduce are the complete dismissiveness with which elites treat the problems of the working and underclasses and the attitude that political sacred cows like environmental law should remain untouchable, along with an overconfidence that the world’s largest economy can operate almost entirely on service-sector jobs with no dire consequences.

Former treasury secretary Lawrence Summers made the mistake of saying the quiet part of the neoliberal vision out loud when he argued that polluting industries should migrate to the least-developed economies of the world.36 In terms of profit margins, this is probably correct, since pollution havens externalize the cost of pollution onto the health of their own populations. Morally and socially, however, it is more just for poor countries to advance without undue pollution, while companies internalize the cost of pollution abatement in the United States with the help of better trade and labor policies to protect jobs.

To recognize the unintended consequences of current regulation means accepting that the dramatically cleaner environment we now live in is not a never-ending journey toward a science-fiction utopia: it is a largely successful campaign against industrial pollution. Levels of carbon emissions per million dollars of GDP have now fallen to levels last seen in the 1850s.37 But this success has not been balanced against the cumulative damage that static regulation has caused in other parts of our society, and this damage now affects us all.

Americans must take a deep look inside our legal and regulatory structures, and make changes. We need to figure out how to protect jobs in industries that pollute while making them cleaner, and to develop trade and environmental policies that work together, rather than at cross‑purposes. We need to rebuild the American workforce in a way that creates jobs supporting healthier families, and move beyond the counterproductive moralism of the environmental activist community.

While the dash to an economy driven by software, services, and finance may have supported growth for the past few decades, these new industries completely fail to meet the spiritual and political needs of working-class communities of all races who are now deprived of the dignity that comes from meaningful work. If anything, the unintended effect of this new economy has been to diminish human dignity. The root causes of this social and economic dislocation are many and overlapping, but the adverse consequences of environmental policy, as currently practiced in the United States, are perhaps the most under­appreciated. Something needs to change.

This article originally appeared in American Affairs Volume V, Number 4 (Winter 2021): 93–109.

1 Environmental Protection Agency, “Our Nation’s Air,” June 2020.

2 Kerwin Kofi Charles, Erik Hurst, and Mariel Schwarz, “The Transformation of Manufacturing and the Decline in U.S. Unemployment,” NBER Macroeconomic Annual 33 (2018): 318.

3 Roge Karma, “‘Deaths of Despair’: The Deadly Epidemic That Predated Coronavirus,” Vox, April 15, 2020.

4 Environmental Protection Agency, “EPA at 50: Progress in Providing Safe Drinking Water,” February 18, 2020.

5 Michael Greenstone, “The Connection between Cleaner Air and Longer Lives,” New York Times, September 24, 2015.

6 Greenstone, New York Times.

7 Bernard D. Goldstein, “The Precautionary Principle Also Applies to Public Health Action,” American Journal of Public Health 91, no. 9 (September 2001): 1358–61.

8 Nicholas A. Ashford, “The Legacy of the Precautionary Principle in U.S. Law,” DSpace@MIT, November 2006.

9 Gregory N. Mandel and James Thuo Gathii, “Cost-Benefit Analysis versus the Precautionary Principle: Beyond Cass Sunstein’s Laws of Fear,” University of Illinois Law Review 2006, no. 5 (2006): 1037.

10 Mandel and Gathii, University of Illinois Law Review.

11 Mark C. Rutzick, “A Long and Winding Road: How the National Environmental Policy Act Has Been the Most Expensive and Least Effective Environmental Law in the History of the United States, and How to Fix It,” Regulatory Transparency Project, October 16, 2018.

12 Council on Environmental Quality, “NEPA’s 40 Most Asked Questions,” 46 Fed. Reg. 18026-18038 (1981), 26.

13 National Association of Environmental Professionals, 2016 Annual Report, October 11, 2017.

14 Cory Paul, “NextDecade Calls Sierra Club Challenge ‘Bare Attempt to Delay’ LNG Project,” S&P Global, June 4, 2019.

15 Niina H. Farah, “Court Orders New NEPA Review for Texas LNG Plants,” E&E News, August 4, 2021.

16 “FERC Must Revisit Climate Analysis of South Texas LNG Plants,” BIC Magazine, August 9, 2021.

17 Matt Piotrowski, “Cancellations, Delays of Capital-Intensive Projects Pose Long Term Risks,” The Fuse, October 27, 2017.

18 Linda Wilson Fuoco and Hallie Lauer, “In the Mon Valley—Where U.S. Steel Has Canceled Major Investment—Many Left Wondering What Went Wrong,” Pittsburgh Post-Gazette, May 3, 2021.

19 Don Hopey, “Allegheny County’s Proposed Coke Oven Rules Are Hot Topic,” Pittsburgh Post-Gazette, October 25, 2020.

20 “United States Steel Corporation Announces Goal to Achieve Carbon Neutrality by 2050” (press release), BusinessWire, April 21, 2021.

21 Dennis Gilfillan et al., “Global, Regional, and National Fossil-Fuel CO2 Emission: 1751–2017,” U.S. Department of Energy, 2020.

22 James E. McCarthy and Richard K. Lattanzio, “Cost and Benefit Considerations in Clean Air Act Regulations,” Congressional Research Service, May 5, 2017.

23 Executive Order 12866, “Regulatory Planning and Review,” September 30, 1993.

24 U.S. EPA, The Benefits and Costs of the Clean Air Act, 1970 to 1990 (October 1997), Table ES-1 and, more generally, ES-2 to ES-9.

25 U.S. EPA, The Benefits and Costs of the Clean Air Act.

26  U.S. EPA, The Benefits and Costs of the Clean Air Act, Extract, 2. The structure of the analytical design and review in the report may have been flawed from the start, with the retrospective analysis answering the following question: “How do the overall health, welfare, ecological, and economic benefits of Clean Air Act programs compare to the costs of these programs?” (emphasis added). By examining the overall benefits of regulation but only the narrow costs, there is no doubt large net benefits would be found—benefits so great as to largely preempt debate—which could be the ultimate goal of the analytical design.

27 Laarni T. Bulan, “Real Options, Irreversible Investment and Firm Uncertainty: New Evidence from U.S. Firms,” Review of Financial Economics 14, Special Issue on Real Options (2005): 255–79.

28 Karma, Vox.

29 McCarthy and Lattanzio, “Cost and Benefit Consideration in Clean Air Act Regulations.”

30 Ronald Shadbegian and Wayne Gray, “Pollution Abatement Expenditures and Plant-Level Productivity: A Production Function Approach,” Census Working Paper #CES-030-16, August 2003.

31 Arik Levinson and M. Scott Taylor, “Unmasking the Pollution Haven Effect,” International Economic Review 49, no. 1 (February 2008).

32 Ben S. Bernanke, “Irreversibility, Uncertainty, and Cyclical Investment,” Quarterly Journal of Economics 97, no. 1 (February 1983): 85–106.

33 See R. A. Becker and J. V. Henderson, “Effects of Air Quality Regulations on Polluting Industries,” Journal of Political Economy 108 (2000): 379–421; M. Greenstone, “The Impacts of Environmental Regulation on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Acts and the Census of Manufactures,” Journal of Political Economy 110 (2002): 1175–219; J. Ederington and J. Minier, “Is Environmental Policy a Secondary Trade Barrier? An Empirical Analysis,” Canadian Journal of Economics 36 (2003): 137–54; S. B. Brunnermeier and A. Levinson, “Examining the Evidence on Environmental Regulations and Industry Location,” Journal of the Environment and Development 13 (2004): 6–41.

34 Scott Reynolds Nelson, “Steel Drivin’ Man: John Henry, the Untold Story of an American Legend,” (video) Virginia Museum of History and Culture.

35 William Grimes, “Taking Swings at a Myth, with John Henry, the Man,” New York Times, October 18, 2006.

36 Toxic Memo,” Harvard Magazine, May 1, 2001.

37 Gilfillan et al., “Global, Regional, and National Fossil-Fuel CO2 Emission: 1751–2017.”

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