Economically inefficient regulations

The 1990 Clean Air Act has been estimated to cost Americans around $30 billion a year by the early years of the next century, for environmental gains of less than half that amount. A recent review of green policies of the USA by the EPA reckoned that the cost of complying with them was already higher as a proportion of GNP than in any other country (except, perhaps, western Germany), and would rise to at least 2.6% of GNP by the end of the century. Already such policies cost one-third of the nation's spending on medical care.

The estimated cost to British business of new environmental regulations is estimated to be many billions of pounds a year. Proposals to increase the efficiency of gas boilers alone will cost the UK £2 billion, and implementing the proposed directive on diesel engine pollution will cost £70 million a year in extra fuel costs. Early EEC/EU calculations (1991) estimated that the proposed carbon tax could raise coal and heavy fuel costs by 30% (by 1995), electricity costs by 16% (by 2000) and natural gas costs by almost 31%, though not uniformly across the community due to national differences in existing tax regimes.