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The Impact of Voluntary Programs on Polluting Behavior: Evidence from Pollution Prevention Programs and Toxic Releases

Author

Listed:
  • Linda T. M. Bui

    (Department of Economics, Brandeis University)

  • Samuel Kapon

    (Undergraduate student, Brandeis University)

Abstract

We investigate how a class of voluntary environmental initiatives known as pollution prevention (“P2”) programs affect toxic pollution. We construct a data base on federal and state-level P2 programs and exploit variation in adoption dates and program characteristics to study their effects on facility-level releases. We find convincing evidence that these mechanisms can alter polluter behavior. In particular, we find that (1) state P2 programs had a significant impact on average facility level toxic releases, reducing annual releases by 11%-15%; (2) for every $100,000 of federal matching funds awarded for state P2 activities, average facility level releases in the recipient state declined on the order of 1%-1.5%; (3) P2-induced reductions are significantly enhanced by information spillovers, diffused primarily via industry networks rather than geographic proximity; (4) facilities respond to technical assistance programs by reducing toxic releases, but only for substances that are not simultaneously regulated by formal command and control strategies; and (5) facilities respond to filing fees and non-reporting penalties by altering their toxic releases, but only for chemicals that are easily monitored by regulators.

Suggested Citation

  • Linda T. M. Bui & Samuel Kapon, 2010. "The Impact of Voluntary Programs on Polluting Behavior: Evidence from Pollution Prevention Programs and Toxic Releases," Working Papers 40, Brandeis University, Department of Economics and International Business School, revised Nov 2011.
    • Handle: RePEc:brd:wpaper:40
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    References listed on IDEAS

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    Cited by:

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    2. Zhou, P. & Delmas, M.A. & Kohli, A., 2017. "Constructing meaningful environmental indices: A nonparametric frontier approach," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 21-34.
    3. Chen, Shiyi & Jiang, Lingduo & Liu, Wanlin & Song, Hong, 2022. "Fireworks regulation, air pollution, and public health: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 92(C).
    4. Bin Ni, 2015. "Productivity, Capital Intensity and ISO14001 Adoption \Theory and Evidence from Vietnam," Discussion Papers in Economics and Business 15-26, Osaka University, Graduate School of Economics.
    5. Li Chang & Wenjing Li & Xiaoyan Lu, 2015. "Government Engagement, Environmental Policy, and Environmental Performance: Evidence from the Most Polluting Chinese Listed Firms," Business Strategy and the Environment, Wiley Blackwell, vol. 24(1), pages 1-19, January.
    6. Hidemichi Fujii & Shunsuke Managi, 2013. "Decomposition of Toxic Chemical Substance Management in Three U.S. Manufacturing Sectors from 1991 to 2008," Journal of Industrial Ecology, Yale University, vol. 17(3), pages 461-471, June.
    7. Henian Wang & Xinxiao Yu, 2014. "A review of the protection of sources of drinking water in China," Natural Resources Forum, Blackwell Publishing, vol. 38(2), pages 99-108, May.
    8. Kube, Roland & von Graevenitz, Kathrine & Löschel, Andreas & Massier, Philipp, 2019. "Do voluntary environmental programs reduce emissions? EMAS in the German manufacturing sector," Energy Economics, Elsevier, vol. 84(S1).
    9. Keith Brouhle & Brad Graham & Donna Ramirez Harrington, 2023. "Patents and P2: Innovation and Technology Adoption for Environmental Improvements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(2), pages 439-474, February.
    10. Huan Li & Neha Khanna & Martina Vidovic, 2018. "The effects of third party certification on voluntary self-regulation of accidents in the U.S. chemical industry," Journal of Regulatory Economics, Springer, vol. 53(3), pages 327-356, June.
    11. Gupta, Sonam & Innes, Robert, 2014. "Private politics and environmental management," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 319-339.
    12. Sangyoul Lee & Xiang Bi, 2019. "Can adoption of pollution prevention techniques reduce pollution substitution?," PLOS ONE, Public Library of Science, vol. 14(11), pages 1-18, November.
    13. Fraas, Art & Egorenkov, Alex, 2015. "A Retrospective Study of EPA’s Air Toxics Program under the Revised Section 112 Requirements of the Clean Air Act," RFF Working Paper Series dp-15-23, Resources for the Future.
    14. Fabien Martinez, 2015. "A Three-Dimensional Conceptual Framework of Corporate Water Responsibility," Post-Print hal-02887624, HAL.
    15. Xiang Bi & Connor Mullally, 2021. "Does Peer Adoption Increase the Diffusion of Pollution Prevention Practices?," Land Economics, University of Wisconsin Press, vol. 97(1), pages 224-245.
    16. Finger, Stephen R. & Gamper-Rabindran, Shanti, 2013. "Mandatory disclosure of plant emissions into the environment and worker chemical exposure inside plants," Ecological Economics, Elsevier, vol. 87(C), pages 124-136.
    17. Linh Pham & Travis Roach, 2024. "Spillover benefits of carbon dioxide cap and trade: Evidence from the Toxics Release Inventory," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 449-467, January.
    18. Bin Ni & Hanae Tamechika & Tsunehiro Otsuki & Keiichiro Honda, 2016. "Does ISO14001 raise firms f awareness of environmental protection? |Case from Vietnam," Discussion Papers in Economics and Business 16-05, Osaka University, Graduate School of Economics.
    19. Linda T. M. Bui, 2012. "What we Know About What we Know About Toxic Polluter Behavior from the TRI: Evidence from (almost) Twenty Years of TRI Data in The Petroleum Refining Industry," Working Papers 45, Brandeis University, Department of Economics and International Business School.
    20. Christopher J. Blackburn & Mallory E. Flowers & Daniel C. Matisoff & Juan Moreno-Cruz, 2018. "Do Pilot and Demonstration Projects Work?," CESifo Working Paper Series 7252, CESifo.
    21. Daniel Matisoff, 2015. "Sources of specification errors in the assessment of voluntary environmental programs: understanding program impacts," Policy Sciences, Springer;Society of Policy Sciences, vol. 48(1), pages 109-126, March.
    22. Xiang Bi & Madhu Khanna, 2017. "Inducing pollution prevention adoption: effectiveness of the 33/50 voluntary environmental program," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 60(12), pages 2234-2254, December.
    23. Huang, Henry He & Liu, Chanjuan & Sun, Li, 2019. "Chemical releases and corporate cash holdings," International Review of Financial Analysis, Elsevier, vol. 64(C), pages 159-173.
    24. Stephen Bahadar & Muhammad Nadeem & Rashid Zaman, 2023. "Toxic chemical releases and idiosyncratic return volatility: A prospect theory perspective," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(2), pages 2109-2143, June.
    25. Li, Huan & Khanna, Neha & Vidovic, Martina, 2014. "Third Party Certification and Self-Regulation: Evidence from Responsible Care and Accidents in the US Chemical Industry," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170492, Agricultural and Applied Economics Association.

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