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Air pollution abatement costs under the Clean Air Act: evidence from the PACE survey

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  • Becker, Randy A.

Abstract

This paper uses establishment-level data from the U.S. Census Bureau’s Pollution Abatement Costs and Expenditures (PACE) survey to investigate the effects of air quality regulation on the air pollution abatement capital expenditures and operating costs of manufacturing plants from 1979-1988. Results, based on some 90,000 observations, show that heavy emitters of the “criteria” air pollutants (covered under the Clean Air Act) had significantly larger APA costs, and those subject to greater “local” regulation (due to county NAAQS non-attainment) had expenditures that were greater still. The local regulation of a particular air pollutant generally resulted in hundreds of thousands of dollars (or more) of additional costs, with larger establishments and capital expenditures disproportionately affected. Federal and state environmental standards appear to have played a notable role, particularly in industries producing chemicals, petroleum, primary metals, and nonmetallic minerals. The findings of this paper support those of several recent studies.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 50 (2005)
Issue (Month): 1 (July)
Pages: 144-169

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Handle: RePEc:eee:jeeman:v:50:y:2005:i:1:p:144-169

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Web page: http://www.elsevier.com/locate/inca/622870

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  1. Kenneth Y. Chay & Michael Greenstone, 2005. "Does Air Quality Matter? Evidence from the Housing Market," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 113(2), pages 376-424, April.
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  4. Randy Becker & Vernon Henderson, 2000. "Effects of Air Quality Regulations on Polluting Industries," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(2), pages 379-421, April.
  5. Carlo Carraro & Gilbert E. Metcalf, 2000. "Behavioral and Distributional Effects of Environmental Policy Introduction," NBER Working Papers 7648, National Bureau of Economic Research, Inc.
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  7. John A. List & W. Warren McHone, 2000. "Measuring the effects of air quality regulations on "dirty" firm births: Evidence from the neo- and mature-regulatory periods," Papers in Regional Science, Springer, Springer, vol. 79(2), pages 177-190.
  8. Dean, Thomas J. & Brown, Robert L. & Stango, Victor, 2000. "Environmental Regulation as a Barrier to the Formation of Small Manufacturing Establishments: A Longitudinal Examination," Journal of Environmental Economics and Management, Elsevier, Elsevier, vol. 40(1), pages 56-75, July.
  9. Gray, Wayne B. & Deily, Mary E., 1996. "Compliance and Enforcement: Air Pollution Regulation in the U.S. Steel Industry," Journal of Environmental Economics and Management, Elsevier, Elsevier, vol. 31(1), pages 96-111, July.
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  12. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, Econometric Society, vol. 39(5), pages 829-44, September.
  13. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 33(1), pages 132-163, March.
  14. Matthew E. Kahn, 1998. "The Silver Lining of Rust Belt Manufacturing Decline," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1828, Harvard - Institute of Economic Research.
  15. Arik Levinson, 1999. "An Industry-Adjusted Index of State Environmental Compliance Costs," NBER Working Papers 7297, National Bureau of Economic Research, Inc.
  16. Wayne B. Gray & Ronald J. Shadbegian, 1995. "Pollution Abatement Costs, Regulation, and Plant-Level Productivity," NBER Working Papers 4994, National Bureau of Economic Research, Inc.
  17. Revesz, Richard L. & Stavins, Robert N., 2007. "Environmental Law," Handbook of Law and Economics, Elsevier, Elsevier.
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  20. Kahn, Matthew E & Matsusaka, John G, 1997. "Demand for Environmental Goods: Evidence from Voting Patterns on California Initiatives," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 40(1), pages 137-73, April.
  21. Pashigian, B Peter, 1984. "The Effect of Environmental Regulation on Optimal Plant Size and Factor Shares," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 27(1), pages 1-28, April.
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