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Transboundary spillovers and decentralization of environmental policies

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  • Sigman, Hilary

Abstract

Most US federal environmental policies allow states to assume responsibility for implementation and enforcement of regulations; states with this responsibility are referred to as "authorized'' or having "primacy.'' Although such decentralization may have benefits, it may also have costs with pollution spillovers across states. This paper estimates these costs empirically by studying the free riding of states authorized under the Clean Water Act. The analysis examines water quality in rivers around the US and includes fixed effects for the location where water quality is monitored to address unobserved geographic heterogeneity. The estimated equations suggest that free riding gives rise to a 4% degradation of water quality downstream of authorized states, with an environmental cost downstream of $17 million annually.

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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: 82-101

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Handle: RePEc:eee:jeeman:v:50:y:2005:i:1:p:82-101

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

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  1. Sigman, Hilary, 2003. "Letting States Do the Dirty Work: State Responsibility for Federal Environmental Regulation," National Tax Journal, National Tax Association, National Tax Association, vol. 56(1), pages 107-22, March.
  2. Wayne B. Gray & Ronald J. Shadbegian, 2002. "‘Optimal’ Pollution Abatement – Whose Benefits Matter, and How Much?," NCEE Working Paper Series, National Center for Environmental Economics, U.S. Environmental Protection Agency 200205, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Sep 2002.
  3. Hilary Sigman, 2001. "International Spillovers and Water Quality in Rivers: Do Countries Free Ride?," Departmental Working Papers, Rutgers University, Department of Economics 200111, Rutgers University, Department of Economics.
  4. Oates, Wallace E. & Schwab, Robert M., 1988. "Economic competition among jurisdictions: efficiency enhancing or distortion inducing?," Journal of Public Economics, Elsevier, Elsevier, vol. 35(3), pages 333-354, April.
  5. Levinson, Arik, 2003. "Environmental Regulatory Competition: A Status Report and Some New Evidence," National Tax Journal, National Tax Association, National Tax Association, vol. 56(1), pages 91-106, March.
  6. John A. List & Shelby Gerking, 2000. "Regulatory Federalism and Environmental Protection in the United States," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 40(3), pages 453-471.
  7. Revesz, Richard L. & Stavins, Robert N., 2007. "Environmental Law," Handbook of Law and Economics, Elsevier, Elsevier.
  8. Helland, Eric & Whitford, Andrew B., 2003. "Pollution incidence and political jurisdiction: evidence from the TRI," Journal of Environmental Economics and Management, Elsevier, Elsevier, vol. 46(3), pages 403-424, November.
  9. Kahn, Matthew E., 2004. "Domestic pollution havens: evidence from cancer deaths in border counties," Journal of Urban Economics, Elsevier, Elsevier, vol. 56(1), pages 51-69, July.
  10. Murdoch, James C & Sandler, Todd & Sargent, Keith, 1997. "A Tale of Two Collectives: Sulphur versus Nitrogen Oxides Emission Reduction in Europe," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 64(254), pages 281-301, May.
  11. James R. Markusen & Edward R. Morey & Nancy Olewiler, 1992. "Noncooperative Equilibria in Regional Environmental Policies When Plant Locations are Endogenous," NBER Working Papers 4051, National Bureau of Economic Research, Inc.
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