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Are management-based regulations effective? Evidence from state pollution prevention programs

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  • Lori Snyder Bennear

    (Nicholas School of the Environment, Duke University)

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    Abstract

    This paper evaluates a recent innovation in regulating risk called management-based regulation. Traditionally, risk regulation has either specified a particular means of achieving a risk-reduction goal or specified the goal and left the means of achieving that goal up to the regulated entity. In contrast, management-based regulation neither explicitly imposes the means, nor the ends. Rather, what is required is that each regulated entity review its production processes and develop a set of goals and procedures that will reduce risk. I evaluate the effectiveness of management-based regulation by taking advantage of policy variation that occurred when 14 states adopted such regulations for toxic chemical control in the 1990s. Using panel data for just over 31,000 manufacturing plants in the United States, I investigate whether facilities subject to management-based regulations had larger changes in total quantities of toxic chemical releases, engaged in more pollution prevention activities, or reported fewer toxic chemicals to the Toxics Release Inventory (TRI). The results indicate that management-based regulation has had a measurable positive effect on the environmental performance of manufacturing plants. In particular, plants subject to management-based regulation experienced larger decreases in total pounds of toxic chemicals released and were more likely to engage in source reduction activities. © 2007 by the Association for Public Policy Analysis and Management

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    File URL: http://hdl.handle.net/10.1002/pam.20250
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

    Volume (Year): 26 (2007)
    Issue (Month): 2 ()
    Pages: 327-348

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    Handle: RePEc:wly:jpamgt:v:26:y:2007:i:2:p:327-348

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    Web page: http://www3.interscience.wiley.com/journal/34787/home

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    1. Michael Greenstone, 2003. "Estimating Regulation-Induced Substitution: The Effect of the Clean Air Act on Water and Ground Pollution," American Economic Review, American Economic Association, American Economic Association, vol. 93(2), pages 442-448, May.
    2. Linda T. M. Bui & Christopher J. Mayer, 2003. "Regulation and Capitalization of Environmental Amenities: Evidence from the Toxic Release Inventory in Massachusetts," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 693-708, August.
    3. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 119(1), pages 249-275, February.
    4. Matthew Potoski & Aseem Prakash, 2005. "Covenants with weak swords: ISO 14001 and facilities' environmental performance," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 24(4), pages 745-769.
    5. Anna Alberini & Kathleen Segerson, 2002. "Assessing Voluntary Programs to Improve Environmental Quality," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 22(1), pages 157-184, June.
    6. 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.
    7. Arora Seema & Cason Timothy N., 1995. "An Experiment in Voluntary Environmental Regulation: Participation in EPA's 33/50 Program," Journal of Environmental Economics and Management, Elsevier, vol. 28(3), pages 271-286, May.
    8. Vernon Henderson, 1995. "Effects of Air Quality Regulation," NBER Working Papers 5118, National Bureau of Economic Research, Inc.
    9. Khanna, Madhu & Damon, Lisa A., 1999. "EPA's Voluntary 33/50 Program: Impact on Toxic Releases and Economic Performance of Firms," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 1-25, January.
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    Cited by:
    1. Werner Antweiler & Kathryn Harrison, 2007. "Canada's voluntary ARET program: Limited success despite industry cosponsorship," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 26(4), pages 755-774.
    2. Hyunhoe Bae & Peter Wilcoxen & David Popp, 2008. "Information Disclosure Policy: Do States' Data Processing Efforts Help More than the Information Disclosure Itself?," NBER Working Papers 14409, National Bureau of Economic Research, Inc.
    3. Harrington, Donna Ramirez, 2012. "Two-stage adoption of different types of pollution prevention (P2) activities," Resource and Energy Economics, Elsevier, Elsevier, vol. 34(3), pages 349-373.
    4. Anil R. Doshi & Glen W.S. Dowell & Michael W. Toffel, 2011. "How Firms Respond to Mandatory Information Disclosure," Harvard Business School Working Papers, Harvard Business School 12-001, Harvard Business School, revised Jun 2012.
    5. Gireesh Shrimali & Steffen Jenner & Felix Groba & Gabriel Chan & Joe Indvik, 2012. "Have State Renewable Portfolio Standards Really Worked?: Synthesizing Past Policy Assessments," Discussion Papers of DIW Berlin 1258, DIW Berlin, German Institute for Economic Research.
    6. Carley, Sanya, 2009. "State renewable energy electricity policies: An empirical evaluation of effectiveness," Energy Policy, Elsevier, Elsevier, vol. 37(8), pages 3071-3081, August.
    7. Donna Ramirez Harrington, 2013. "Effectiveness Of State Pollution Prevention Programs And Policies," Contemporary Economic Policy, Western Economic Association International, Western Economic Association International, vol. 31(2), pages 255-278, 04.
    8. Johnstone, Nick & Labonne, Julien, 2009. "Why do manufacturing facilities introduce environmental management systems? Improving and/or signaling performance," Ecological Economics, Elsevier, Elsevier, vol. 68(3), pages 719-730, January.

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