Environmental Regulations Decreased Manufacturing Productivity And Output By $21 Billion Per Year, About 8.8 Percent Of Corporate Profits

Air quality regulations decrease US manufacturing sector productivity. A decline in manufacturing productivity leads to lower wage increases to workers, higher product costs, lower corporate profits and lower employment.

From the abstract to "The Effects Of Environmental Regulation On The Competitiveness Of Us Manufacturing" by Michael Greenstone, John A. List and Chad Syverson, NBER Working Paper 18392:

ABSTRACTThe economic costs of environmental regulations have been widely debated since the U.S. began to restrict pollution emissions more than four decades ago. Using detailed production data from nearly 1.2 million plant observations drawn from the 1972-1993 Annual Survey of Manufactures, we estimate the effects of air quality regulations on manufacturing plants’ total factor productivity (TFP) levels.***... produce a 4.8 percent estimated decline in TFP for polluting plants in regulated areas. This corresponds to an annual economic cost from the regulation of manufacturing plants of roughly $21 billion, about 8.8 percent of manufacturing sector profits in this period.

From the body of the paper:

The economic costs of environmental regulations have been widely debated since the U.S. began to restrict pollution emissions more than four decades ago through the Clean Air and Water Acts.***TFP declines by 4.8 percent for polluting plants in nonattainment counties. This corresponds to an annual economic cost from the regulation of manufacturing plants of roughly $21 billion in 2010 dollars. This translates into a loss of more than $450 billion over the studied period.***Are these TFP losses big? They correspond to annual lost output in the manufacturing sector of about $20.8 billion in 2010 dollars. This is roughly 8.8 percent of average manufacturing sector profits over this period. It is noteworthy that the estimated costs are substantially larger than the costs borne by workers in polluting industries (Walker 2012). At least in the case of the Clean Air Act and the manufacturing sector, it seems reasonable to conclude that the claim that environmental regulations are costless or even beneficial for the regulated is contradicted by the available data.