From Brown to Green 

It's a myth that environmental laws are job killers. In fact, the East Bay is home to many cleaned-up toxic sites that are now spurring the economy.

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But a different problem with the way cleanup is funded has recently arisen. Some of Oakland's biggest brownfields lie in the sprawling, economically depressed areas around the Coliseum, and around Foothill Boulevard and Seminary Avenue. The city has staked cleanup efforts in these zones on massive redevelopment proposals, including grandiose ideas like building new privately financed stadiums to entice the A's and Raiders to stick around. Thrown in would be enormous projects, including housing, shopping centers, and transit facilities. No one really knows what the final blueprints will look like, but no matter what, it will require lots of state funding. In years past, the city's redevelopment agency footed these bills. But the recent elimination of redevelopment agencies by Governor Jerry Brown and the legislature means that state tax dollars previously allocated for these sorts of big, publicly seeded development projects are probably gone. Budget pressures exerted by the loss of redevelopment agency funds could further skew what few environmental remediation projects move forward.

And if Congress and the president continue to slash EPA funding, it's possible that specific remediation projects in the East Bay and beyond could become stalled, which means that significant sums of property and retail tax dollars will never become available for cities that have been hard hit by decades of capital flight.

For example, the former Lane Metal Finishers site on San Pablo Avenue at 30th Street in Oakland is contaminated by a cocktail of volatile chemicals and poisonous compounds, including sodium hydroxide; hydrochloric, nitric, and sulfuric acids; cadmium; and potassium cyanide. Chemicals detected in soil, ground water, and soil gas include trichloroethylene and vinyl chloride. In homes and businesses adjacent to the site, EPA staff measured toxic gases in concentrations exceeding state safety limits.

A school, a child-care center, and several churches are within 1,000 feet of the Lane Metal Finishers site. The neighborhood is predominantly black and Asian, and working class. EPA is currently carrying out a pilot study to attempt to extract soil vapors, but more work needs to be done to protect nearby residents and to bring this real estate back into the economy, hopefully in a way that benefits those who live there.

But funds are scarce. "We have made cuts just like everyone else to accommodate for the state's budget shortfall," admitted Lindsay VanLaningham of Cal EPA. "We've cut positions, cellphones, and travel." VanLaningham noted, however, that "because [DTSC] is almost 97-percent special funded, we are able to continue with our core programs that protect and preserve the environment and public health." This is because Cal EPA and DTSC's funds come largely from fees and penalties paid by corporations and developers whose activities can negatively impact the environment.

Yet even these fees and penalties are not safe from misguided or cynical attempts by politicians to "reform" regulatory policy or "fix the budget." Early in 2011, Republican state lawmakers demanded an overhaul of California environmental regulations as part of any possible budget deal with Governor Brown. At the time, they were essentially talking about eliminating the regulatory sources of these revenues, a move that might require major cuts to programs like brownfield cleanup.

And a wider assault on environmental regulations could cause economic stagnation across California and the nation's economy in more systematic ways.


So if environmental regulations can turn brownfields into fields of green, why have mainstream economists, politicians, and business leaders gotten it so backward? In 1991, a professor in the Harvard Business School — hardly a bastion of environmentalism — was among the first to question the mythology surrounding environmental regulation, touching off two decades of debate and research that has provided ample evidence in favor of strong environmental laws and regulations as good economic policy.

"Strict environmental regulations do not inevitably hinder competitive advantage against rivals," wrote Michael Porter in a Scientific American article more than twenty years ago. "Indeed, they often enhance it."

Porter's point was two-pronged and designed to appeal to his audience of fellow economists and business leaders. On the one hand he surmised that in the absence of strong environmental laws and regulations, firms, and even whole economies, actually waste resources. This lack of efficiency causes them to be much less competitive with other companies and regions. With smart, focused regulations aimed at reducing wasteful pollution, productivity rises and the whole economy grows. Second, Porter conjectured that well-designed regulations actually can spur technological and resource innovation, leading not only to compliance and a healthier environment, but perhaps even savings for companies, and whole new business opportunities for those who do the cleanup.

An entire new school of economists is testing this theory with rigorously designed experiments and case studies. Their findings, overall, are that there is no inherent "jobs versus environment" problem.

"In reality, the few empirical studies that have tracked actual changes in employment from environmental regulation suggest that there is either no impact, or a small positive impact on employment," explained Mark Cohen, a professor of management and law at Vanderbilt University in Tennessee. Cohen's academic research into the relationship between environmental law and the economy took off in the early 1990s when he became the co-director of Vanderbilt's Center for Environmental Management Studies. Previously, he had worked as a senior research economist for multiple branches of the federal government including the Federal Trade Commission and the EPA. His forthcoming book, The Distributional Consequences of Energy and Climate Policy, a painstakingly researched volume drawing on the most recent research and available data, directly addresses the relationship between government regulation and economic growth.

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