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Do environmental regulations reduce greenhouse gas emissions? A study on Canadian industries

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  • Sedigh, Golnaz

Abstract

This paper uses the Canadian industrial macro-level data from CANSIM to investigate the effect of formal and informal regulations on pollution intensity. Proxies for formal and informal regulation variables are defined as in Cole et al., 2005. The econometrics model is a panel with 23 manufacturing industries over 10 years, from 1994 to 2003. Manufacturing industries are chosen because they are the most pollutant industries. It is found that formal and informal regulations have significant effects on decreasing the direct and indirect greenhouse gas emissions in Canadian industries. Provinces with younger populations have stricter informal regulation on pollution density, because younger populations care more about the future quality of the environment. Also, provinces with a higher rate of unemployment have less formal regulation on pollution density; for those provinces, providing employment for citizens is more important than providing a healthy environment. Wealthier provinces with a low employment rate face less pressure from society and can spend more money on the environment; therefore, they have lower pollution density. Furthermore, industries with large average firm size can decrease emissions more than other industries. The cost of controlling the emissions decreases with firm size because of economies of scale.

Suggested Citation

  • Sedigh, Golnaz, 2008. "Do environmental regulations reduce greenhouse gas emissions? A study on Canadian industries," MPRA Paper 10003, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:10003
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    Keywords

    Keywords: Canadian manufacturing industries; Air pollution; Environmental regulations;
    All these keywords.

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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