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The Effectiveness of Environmental Monitoring and Enforcement: A Review of the Empirical Evidence

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  • Wayne B. Gray
  • Jay P. Shimshack

Abstract

Regulatory punishment for pollution violations is a mainstay of nearly every industrialized nation's environmental policy. This article reviews the existing empirical evidence on the impacts of environmental monitoring and enforcement actions. We first provide context by investigating the U.S. regulatory setting. We then briefly discuss how economists think about environmental enforcement. We next consider recent empirical evidence linking regulator actions to subsequent pollution discharges and compliance behavior. Since the literature primarily studies U.S. institutions, our review focuses mainly on the effects of Environmental Protection Agency and U.S. state activities. The consistent findings from this literature review are as follows: (1) environmental monitoring and enforcement activities generate substantial specific deterrence, reducing future violations at the targeted firm; (2) environmental monitoring and enforcement activities generate substantial general deterrence, reducing future violations at facilities other than the targeted one; and (3) environmental monitoring and enforcement activities generate not only reductions in violations but also significant reductions in emissions. We conclude by discussing policy implications and identifying gaps in the current state of knowledge. Copyright 2011, Oxford University Press.

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Bibliographic Info

Article provided by Association of Environmental and Resource Economists in its journal Review of Environmental Economics and Policy.

Volume (Year): 5 (2011)
Issue (Month): 1 (Winter)
Pages: 3-24

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Handle: RePEc:oup:renvpo:v:5:y:2011:i:1:p:3-24

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References

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Citations

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Cited by:
  1. Lirong Liu, 2013. "Analysis of Firm Compliance with Multiple Environmental regulations," Economics Bulletin, AccessEcon, vol. 33(3), pages 1695-1705.
  2. Sarah L. Stafford, 2012. "What Affects the Environmental Performance of Pipelines in the US? An Empirical Analysis," Working Papers 123, Department of Economics, College of William and Mary.
  3. Lana Friesen & Dietrich Earnhart, 2012. "Can Punishment Generate Specific Deterrence without Updating? Analysis of a Stated Choice Scenario," Discussion Papers Series 468, School of Economics, University of Queensland, Australia.
  4. Kjetil Telle, 2012. "Monitoring and enforcement of environmental regulations. Lessons from a natural field experiment in Norway," Discussion Papers 680, Research Department of Statistics Norway.
  5. Sarah Stafford, 2013. "How predictable are environmental compliance inspections?," Journal of Regulatory Economics, Springer, vol. 44(3), pages 361-388, December.
  6. Friesen, Lana & Gangadharan, Lata, 2013. "Designing self-reporting regimes to encourage truth telling: An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 90-102.
  7. Ujjayant Chakravorty & Céline Nauges & Henry Thille, 2012. "Gasoline Content Regulation and Compliance among US Refineries," CESifo Working Paper Series 3978, CESifo Group Munich.
  8. Allen Blackman, 2012. "Does eco-certification boost regulatory compliance in developing countries? ISO 14001 in Mexico," Journal of Regulatory Economics, Springer, vol. 42(3), pages 242-263, December.
  9. Telle, Kjetil, 2013. "Monitoring and enforcement of environmental regulations," Journal of Public Economics, Elsevier, vol. 99(C), pages 24-34.
  10. Stafford, Sarah L., 2014. "Will additional federal enforcement improve the performance of pipelines in the U.S.?," International Review of Law and Economics, Elsevier, vol. 37(C), pages 137-146.
  11. Carrión-Flores, Carmen E. & Innes, Robert & Sam, Abdoul G., 2013. "Do voluntary pollution reduction programs (VPRs) spur or deter environmental innovation? Evidence from 33/50," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 444-459.
  12. Escobar, Ninel & Chávez, Carlos, 2013. "Monitoring, firms’ compliance and imposition of fines: evidence from the Federal Industrial Inspection Program in Mexico City," Environment and Development Economics, Cambridge University Press, vol. 18(06), pages 723-748, December.
  13. Vilen Lipatov, 2014. "Compliance Dynamics Generated by Social Interaction Rules," CESifo Working Paper Series 4767, CESifo Group Munich.
  14. Gonzalez, Fidel & Leipnik, Mark & Mazumder, Diya, 2013. "How much are urban residents in Mexico willing to pay for cleaner air?," Environment and Development Economics, Cambridge University Press, vol. 18(03), pages 354-379, June.
  15. Sarah L. Stafford, 2011. "Do Environmental Audits Improve Long-term Compliance? Evidence from Manufacturing Facilities in Michigan," Working Papers 117, Department of Economics, College of William and Mary.
  16. Mieno, Taro & Brozovic, Nicholas, 2012. "Unraveling deterrence effects of regulatory activities under Clean Water Act," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124612, Agricultural and Applied Economics Association.
  17. Juergen Jung & Michael Makowsky, 2014. "The determinants of federal and state enforcement of workplace safety regulations: OSHA inspections 1990–2010," Journal of Regulatory Economics, Springer, vol. 45(1), pages 1-33, February.
  18. Donna Ramirez Harrington, 2013. "Effectiveness Of State Pollution Prevention Programs And Policies," Contemporary Economic Policy, Western Economic Association International, vol. 31(2), pages 255-278, 04.
  19. Holstein, Fredrik & Gren, Ing-Marie, 2013. "Violation of environmental regulations in Sweden: Economic motives, environmental attitudes, and social capital," Working Paper Series 2013:3, Department Economics, Swedish University of Agricultural Sciences.
  20. Lirong Liu, 2012. "Analysis of Firm Compliance with Multiple Environmental Regulations," Working Papers 1207, Sam Houston State University, Department of Economics and International Business.
  21. John Bowblis & Judith Lucas, 2012. "The impact of state regulations on nursing home care practices," Journal of Regulatory Economics, Springer, vol. 42(1), pages 52-72, August.
  22. Lana Friesen & Dietrich Earnhart, 2012. "Environmental Management Responses to Punishment: Specific Deterrence and Certainty versus Severity of Punishment," Discussion Papers Series 463, School of Economics, University of Queensland, Australia.

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