The 114th Congress made it clear from the start of their term that the Keystone XL Pipeline Bill would be a priority. After close to a month of debate on the issue, the Senate approved the bill last week with a vote of 62 to 36. The House voted on Wednesday of this week to approve legislation authorizing the construction of the pipeline. With the pressure from Congress to approve the pipeline growing, Obama faces what could be the most divisive veto of his presidency.
As Julia Lennon rightly points out in her blog titled “Where do you stand on the Keystone XL Pipeline?” the debate around the pipeline tends to center on the relative importance of economic prosperity and the environment. While the White House has repeatedly said that Obama will veto the bill, supporters of the pipeline haven’t been discouraged. Laura Barron-Lopez writes, “Republicans are eagerly awaiting Obama’s stroke of the pen, believing every veto he makes will help them make the case that job-creating legislation is being blocked by a president of “no.”[i] This has been the theme in environmental politics of late. Those in opposition of environmental legislation tend to emphasize the economic costs of a given decision, while those in favor tend to emphasize the larger societal benefits. While most environmentalists might argue that environmental policy isn’t enacted with job creation in mind, it is an important question to consider. According to a new report by the Institute for Policy Integrity at New York University’s School of Law, despite the limitations of current methods of measuring job gains and losses, they should be considered when drawing up future environmental rules.[ii] While most economists agree that environmental regulation comes with undeniable costs that can increase unemployment and hurt the competitiveness of American Industry, experts have found that previous regulations, like various amendments to the Clean Air Act, have resulted in far lower costs and job losses than industrial executives initially feared. Not only that, but a study on the effects of these amendments published by the E.P.A in 2011 found that some new jobs were created as companies developed new technologies to cope with new regulations.[iii] This realization is important in that it contradicts the commonly held belief that all environmental policy is bad for economic growth. While it is true that American industry will incur some costs in the short term, environmental policy has been shown to lead to long-term growth. When this realization is taken into account alongside other societal factors, the benefits of environmental regulation can outweigh the costs.
There is no doubt that the Keystone XL pipeline would be an ambitious construction project, however there remains a large amount of discrepancy as to how many jobs the 1,179-mile pipeline will actually create. According to a State Department estimate, 42,100 jobs will be created through the approval of the project, however this estimate includes jobs created by the “ripple” effect of the construction. In an article about the Keystone’s job creation forecast, Amy Picchi points out, “Only about 16,100 of those jobs would be direct employment from firms that are awarded contracts for goods and services from the Keystone project.”[iv] The State Department adds in its report that this estimate represents just 0.02 percent of annual economic activity across the nation. TransCanada (the company that would be responsible for building the pipeline), had job creation estimates that were somewhat more conservative. In a report from January 2012, the company forecasted the creation of 20,000 jobs split between 13,000 in construction and 7,000 in manufacturing. Despite the large differences between these estimates, independent research casted doubt on both figures. Cornell University's Global Labor Institute estimated that just 2,500 to 4,650 temporary construction jobs would be created, and said that, "The industry-generated jobs data is highly questionable and ultimately misleading."[v] So while environmentalists need to be willing to take the economic costs and benefits of any proposal into account, in the case of the Keystone XL the economic benefits do not outweigh the high environmental costs.
What does this cost-benefit analysis of the Keystone project tell us about the broader state of environmental policy and American policy as a whole? This debate touches on a larger point of contention within American politics surrounding the enormous costs associated with sensible global warming policy. While the Republican majority in Congress continues to emphasize the large costs of environmental regulation, many are pointing to the fact that smart environmental regulation can provide stability and economic growth in the long term. In his piece titled ‘Making the Case for the Value of Environmental Rules’ Gernot Wagner writes, “The fact is that sound environmental regulations — whether they address dirty air or an overheating planet — can create jobs and be a boost, rather than a burden, for the economy.”[vi] President Obama has the ability to set us on a new course of “Green Growth”, or cave to industrial interests and the status quo. The American public will anxiously await his decision next week.
[i] Sink, Justin. "Obama Prepares for Divisive Veto." TheHill. ©2015 Capitol Hill Publishing Corp., n.d. Web. 11 Feb. 2015. <http://thehill.com/policy/energy-environment/232028-obama-prepares-for-divisive-veto>.
[ii] Broder, John M. "Environmental Rules: Job Killers or Job Creators?" Green Environmental Rules Job Killers or Job Creators Comments. © 2015 The New York Times Company, 03 Apr. 2012. Web. 11 Feb. 2015. <http://green.blogs.nytimes.com/2012/04/03/environmental-rules-job-killers-or-job-creators/?_r=1>.
[iii] Rich, Motoko, and John Broder. "A Debate Arises on Job Creation and Environment." The New York Times. The New York Times, 04 Sept. 2011. Web. 13 Feb. 2015. <http://www.nytimes.com/2011/09/05/business/economy/a-debate-arises-on-job-creation-vs-environmental-regulation.html?pagewanted=all>.
[iv] Picchi, Amy. "Keystone XL's Mixed Forecast for Job Creation." CBSNews. CBS Interactive, 14 Nov. 2014. Web. 11 Feb. 2015. <http://www.cbsnews.com/news/keystone-xls-mixed-forecast-for-job-creation/>.
[v] Pipe Dreams? Jobs Gained, Jobs Lost by the Construction of Keystone XL. Rep. Cornell University Global Labor Institute, Sept. 2011. Web. 11 Feb. 2015. <https://www.ilr.cornell.edu/sites/ilr.cornell.edu/files/GLI_keystoneXL_Reportpdf.pdf>.
[vi] Wagner, Gernot. "Making the Case for the Value of Environmental Rules." By Gernot Wagner: Yale Environment 360. N.p., 14 Nov. 2011. Web. 11 Feb. 2015. <http://e360.yale.edu/feature/economy_and_the_environment_the_case_for_environmental_rules/2464/>