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Environmental clean-up spending may help boost economy.

Spending in the U.S. to clean up the environment totalled $170 billion in 1992, created four million jobs, and is growing three times as fast as the GDP (Gross Domestic Product), according to forecasts released by Management Information Services, Inc., a Washington, D.C. economic research and management consulting firm. These findings show that environmental spending is an important stimulus to economic growth and job creation, and thus disprove the idea that environmental programs harm the economy and reduce employment. MISI predicts that by the turn of the century, environmental spending in the U.S. will total a quarter trillion dollars, will create 5.4 million jobs, and will be one of the main drivers of economic growth in the nation.

Environmental protection (EP) is forecast to continue to be a rapidly growing, "recession-proof" industry well into the next century, creating substantial sales, profits and jobs throughout the economy:

* In 1995, EP spending will total $198 billion (1992 dollars), creating 4.4 million jobs;

* In 2000, EP spending will total $246 billion (1992 dollars), creating 4.9 million jobs; and

* In 2005, EP spending will total $292 billion (1992 dollars), creating 5.4 million jobs.

Clearly, providing the goods and services required for environmental protection has become a major U.S. industry with significant effects on the economy and labor market. In 1992 MISI estimates that EP expenditures of $170 billion generated:

* $26 billion in corporate profits;

* 4 million jobs; and

* $73 billion in federal, state and local government tax revenues.

The two major industry components of environmental protection are pollution abatement and control (PABCO), which accounted in 1992 for $139 billion; and other environment-related expenses, at $31 billion. The PABCO components are directly related to the control and remediation of the major media types of environmental degradation--air, water, solid waste, radiation, etc. Other environment-related expenditures include spending on programs closely associated with environmental concerns and objectives, such as global warming research, clean energy technologies, utility conservation, demand-side management and similar programs, and related federal, state and local government environmental expenditures.

Spending to protect the environment has been one of the most rapidly and consistently growing "recession proof" industries in the economy for the past 20 years. Real EP spending (1992 dollars) increased from $28 billion in 1970 to $170 billion in 1992. This represents a six-fold increase in expenditures in 20 years--a sustained real average annual rate of growth of nearly nine percent per year over the period. This compares with an average annual rate of growth of GDP that averaged between two and three percent during the 1970s and 1980s. That is, since the late 1960s, spending for pollution abatement and control has been increasing at a rate nearly four times as large as GDP.
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Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Journal of Environmental Health
Date:Apr 1, 1993
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