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Environmental Economics Seminar: Effect of the Regulator-Regulated Entity Relationship on Environmental Management: Coercive vs. Cooperative Enforcement

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Date(s): April 24, 2012, 1 - 2:30 PM

Location: Room 4128, EPA West Building, 1301 Constitution Ave., NW, Washington, DC

Contact: Carl Pasurka, 202-566-2275

Presenter: Dietrich Earnhart (Department of Economics, University of Kansas)

Description: A spirited debate explores the comparative merits of two different approaches to the enforcement of environmental law: the coercive approach, which emphasizes the deterrence of noncompliance through inflexibly imposed sanctions, and the cooperative approach, which emphasizes the inducement of compliance through flexibility and assistance. For all the debate, relatively little empirical research directly compares the two approaches. This study empirically analyzes the effects of these two approaches on environmental management practices linked to compliance with wastewater discharge limits imposed on chemical manufacturing facilities. For this analysis, we view the enforcement approach as representing a relationship between a regulator and a regulated entity that is measured in multiple dimensions. The empirical results reveal that, in general, a cooperative relationship induces better environmental management and, in particular, a more stable and higher quality relationship improves environmental management, while a completely fair relationship impedes better environmental management.

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