Environmental Economics

Why Do Plants Comply with Environmental Regulations? The Importance of Enforcement Activity, Abatement Costs, and Community Pressure.

This study examined factors affecting environmental performance (both compliance status and emissions for air, water, and toxic pollutants) in paper mills, oil refineries, steel mills, and electric utilities. The grantee began with data on each plant, its owning firm and traditional regulatory activity. He then added information on community pressures and political pressures faced by the plant at both the state and local level. He also examined the spatial impacts of regulation on all manufacturing plants in four cities: Los Angeles, Houston, Boston and Columbus. He addressed four questions: (1) How do corporate environmental culture and government regulatory interventions influence a plant’s environmental performance? (2) Do community and political pressures at the state and local level significantly affect performance? (3) Why do firms and plants differ in their responsiveness to government interventions? (4) Is environmental performance at one plant related to the performance of nearby plants?
This project continued and extended what has been a sizable data collection effort. His past research work required the creation of a large plant-level database, linking records from EPA regulatory databases and Census databases for the steel, oil, and paper industries. He extended these data with information from more recent years and added additional variables from various sources. He also developed a plant-level database for coal-fired electric utilities, focusing on the impact of SO2 allowance trading in the 1990s, specifically the spatial distribution of emissions and the population affected by those emissions. Finally, we created a 4-city dataset containing all manufacturing plants in the areas surrounding Los Angeles, Houston, Boston, and Columbus, again linking EPA regulatory datasets with Census plant-level data. Those datasets which do not involve confidential material (e.g. non-Census data) are being made available at his web page at Clark University (http://www.clarku.edu/faculty/wgray). For more information about any of the datasets, including help in working with the merged Census datasets through the Census Research Data Center network, contact the grantee directly (wgray@clarku.edu; 508-793-7693).
During the grant period, he has written eight papers based on these databases and anticipate that the databases will continue to prove useful for a wide range of research projects, both by ourselves and by other researchers, in years to come. The wide range of research work he carried out under this project makes it difficult to provide a single unified summary of the overall project results. Instead, he first identifies what we consider to be the key findings of the research, particularly those connected to the four questions identified in our research objectives. He then discusses the research results on a paper-by-paper basis, identifying the most important research outcomes and their connections to the objectives of the overall project. Later in the report he presents the most recent versions (as of this writing) of each of the papers, for those who wish to see the details of the research and connections to the existing literature.

  • Keywords

    2. Cost-Benefit and Cost Effectiveness Analysis
    2. Cost-Benefit and Cost Effectiveness Analysis - Enforcement and Monitoring
    Environmental Media:
    a. Air
    b. Water
    d. Chemicals
    a. Air - Tropospheric
    b. Water - Surface
    d. Chemicals - Toxic Substances
    Gray, Wayne
    EPA Project Officer/ Manager:
    Carlin, Alan
    Geographic Area:
    Boston, Houston (TX), Los Angeles, United States, Columbus
    Study Purpose:
    Empirical Application, Data Development
    Inventory Record #: EE-0525
  • Participating Organizations

    Research Organization:

    Clark UniversityAddress:
    City: State: ZIP:
    Phone: Fax:
    Funding Organization:
    Environmental Protection Agency, Office of Research and DevelopmentAddress:
    City: State: ZIP:
    Phone: Fax:
  • Report Details
    Number of Pages:
    Grant/Contract #:
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    Date Linked: 07/06/2009