Statutory Rewards to Environmental Self-Auditing: Do They Reduce Pollution and Save Regulatory Costs? Evidence from a Cross-State Panel
AbstractState-level statutes provide firms that engage in environmental self-audits, and that self-report their environmental violations, with a variety of different regulatory rewards, including "immunity" from penalties and "privilege" for information contained in self-audits. This paper studies a panel of State-level industries from 1989-2003, in order to determine the effects of the different statutes on toxic pollution and government inspections. We find that, by encouraging self-auditing, privilege and limited immunity protections tend to reduce pollution and government enforcement activity; however, more sweeping immunity protections, by reducing firms' pollution prevention incentives, raise toxic pollution and government inspection oversight.
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-18 (All new papers)
- NEP-ENV-2008-11-18 (Environmental Economics)
- NEP-REG-2008-11-18 (Regulation)
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