Abstract:We investigate how a class of voluntary environmental initiatives known as pollution prevention (“P2”) programs affect toxic pollution. We construct a data base of federal and state-level P2 programs and exploit variation in adoption dates and program characteristics to study their effects on facility-level releases. We find convincing evidence that these mechanisms alter polluter behavior. In particular, we find that (1) state P2 programs had a significant impact on average facility level toxic releases, reducing annual releases by 11–15%; (2) for every $100,000 of federal matching funds awarded for state P2 activities, average facility level releases in the recipient state declined on the order of 1–1.5%; (3) P2-induced reductions are significantly enhanced by information spillovers, diffused primarily via industry networks rather than geographic proximity; (4) facilities respond to technical assistance programs by reducing toxic releases, but only for substances that are not simultaneously regulated by formal command and control strategies; and (5) facilities respond to filing fees and non-reporting penalties by altering their toxic releases, but only for chemicals that are easily monitored by regulators.
a Department of Economics, Brandeis University, 415 South Street, MS 021, Waltham, MA 02454, United States
b Brandeis University, United States
Volume 64, Issue 1, July 2012, Pages 31–44
Keywords: TRI; Information spillovers; Voluntary programs; Toxic pollution; Environmental regulation