June 18, 2009
Economics of Emissions Testing & Corruption, Plus Response

This letter of mine appeared in this morning's Memphis Commercial Appeal:

"I've found the controversy over emissions waivers (June 16 article, "'Waiver' revs up in auto dispute / Inspection ordinance would OK illegal deal") especially interesting in light of my experience. After barely failing with an older car, we spent a few hundred dollars on repairs and at least an hour in line only to fail again, just barely. I asked if it was possible to get a waiver since I was barely over the hydrocarbon limit and could prove that I had made an expensive, good-faith effort to meet the requirements. I was told no such waivers existed. Hundreds of dollars and many hours later, we finally passed.

There are several lessons here that I plan to incorporate into my Econ 101 lectures on marginal analysis, externalities and public choice theory this fall. First, we have to ask whether the additional benefit of an almost imperceptible increase in air quality is worth the additional cost. I seriously doubt that the social benefit of a tiny reduction in hydrocarbons-per-million was worth the time and money we spent meeting emissions requirements.

Second, regulations like this increase the cost of owning older cars, which puts a special burden on the poor. We are fortunate because our experience with local emissions testing was just an expensive annoyance. For the poor, being saddled with the prospect of hundreds of dollars in repairs to meet emissions standards can be catastrophic.

Finally, this illustrates the law of unintended consequences. Emissions testing has encouraged some people to move outside the city limits. The consequences can be perverse: Regulations intended to improve air quality can actually worsen it. I don't know if this is true in metropolitan Memphis, but it is a possibility that deserves to be studied."

An anonymous commenter ("BogeyMan") posted the following response, which I found interesting:

"Professor Carden: congratulations on yet another successful attempt to justify your affiliation with those right-wing think tanks. I'm sure they'd be proud.

Since you probably don't believe in global warming, I'm not surprised you don't believe in doing everything we can to minimize humans' exacerbation of that problem.

Memphis has a history of just squeaking by the EPA's "non-attainment" (oops, I forgot---you probably don't believe there should be an EPA either), and every summer, we suffer from pollution alerts that create serious problems for outside workers and people with any kind of respiratory problems.

While your non-compliant car was only a tiny part of the pollution problem, in the aggregate, thousands of cars like yours (or worse) create a significant environmental problem.

And please, don't BS us with your feigned concern for the poor. You teach in a place where the parking lot is full of high-end, daddy-bought cars, and the ideology you hew to faithfully has never been much concerned with the plight of the poor.

Finally, no one moves out of Memphis because of car inspections alone. And if they do, their threshold for the requirements of urban life is so low, they've got many more problems with city life than car inspections."

Posted by Art Carden at 08:34 AM in Economics

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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