The Obama administration finds itself in a dilemma. On the one hand, it desperately wants to create jobs. At his "Jobs Summit" last week, the president stated he is committed to ""ideas aimed at accelerating job growth and hiring as we emerge from this economic storm." And who can blame him — less than a year from the off-year elections, the jobless rate is still above 10 percent. If little or no progress has been made by November 2, his political leadership could be challenged.
And yet, this week — just a few days after the president's Jobs Summit — the EPA declared carbon dioxide a public health hazard, opening the door for strict, costly regulations of greenhouse gases. Initially these regs will affect big CO2 generators, such as electric power companies and oil refineries. Some utilities have already determined that it makes more sense to shutter some smaller facilities than buy expensive equipment to meet EPA's higher standards. Ultimately, the public is likely to feel the brunt of this policy decision — in the form of higher prices, or fewer jobs, or both.
While environmental protection does not necessarily put a crimp on economic growth — take, for example, the benefits of installing energy efficient lighting systems, motors, and transformers — one-size-fits-all regulatory mandates are the least efficient way to approach such ecologic goals. Add to this inefficiency the fact that the engines of the U.S. economy are just starting up again, and you have one big dilemma for the administration.
It will be interesting to see how the president handles it.