Equity,efficiency and environmental quality

Many government policies ostensibly designed to serve allocative ends appear to be driven primarily if not exclusively by redistributive considerations. This paper analyzes one such policy, the New Source Performance Standards of the Clean Air Act of 1977, using data derived principally from studies commissioned by and known to those involved in the policy making process. These data are used to produce estimates of the magnitude and relative efficiency of the wealth transfers effected by the policy. Among our conclusions are that, at least with respect to this particular episode, (a) environmental regulation is an extremely inefficient method of transferring wealth and (b) transfers between groups within regions of the U.S. are large relative to transfers between those regions.