Summarizing, the findings for 1982-1989 consistently and unambiguously fail to support the argument that states with stronger environmental policies suffer an economic penalty. All the coefficients hinted at a very weak positive relationship – albeit one that is statistically insignificant – between state environmentalism and economic performance. More importantly the over all odds are better than 15:1 against the proposition that environmental regulation hurt state economic growth during this period.
So why do business leaders and lobbyists single out environmental costs as so noteworthy, when they are comparatively insignificant? To a large extent business still does not perceive environment-related costs as ordinary and proper business costs, recent advertising campaigns to the contrary. Environmental costs are seen as a form of externally imposed social tax, an
illegitimate tax place on business.
In this respect the concepts of “extranalities” and “social costs” have not crossed from business management schools to board rooms. Manufacturing plant owners do not consider taking clean water from and returning chemical-
laden dirty water to the same river as either a public subsidy or imposing a public cost. As one CEO explained “...Look, the public benefits from our products. They use them and they get jobs. Part of the price of this benefit is the impact we have on the environment. That should be born by the public, not the company.” And so for business and industry these costs, however small,
stand out in bold face – despite the fact that they do not tabulate them systematically or reliably.