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

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Author Info
Sedigh, Golnaz

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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.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 10003.

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Date of creation: May 2008
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Handle: RePEc:pra:mprapa:10003

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Related research
Keywords: Keywords: Canadian manufacturing industries; Air pollution; Environmental regulations;

Find related papers by JEL classification:
Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
O13 - Economic Development, 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 (the Commons)
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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  1. Jorgenson, Dale W. & Wilcoxen, Peter J., 1990. "Intertemporal general equilibrium modeling of U.S. environmental regulation," Journal of Policy Modeling, Elsevier, vol. 12(4), pages 715-744. [Downloadable!] (restricted)
  2. Kathuria, Vinish, 2007. "Informal regulation of pollution in a developing country: Evidence from India," Ecological Economics, Elsevier, vol. 63(2-3), pages 403-417, August. [Downloadable!] (restricted)
  3. Berman, Eli & Bui, Linda T. M., 2001. "Environmental regulation and labor demand: evidence from the South Coast Air Basin," Journal of Public Economics, Elsevier, vol. 79(2), pages 265-295, February. [Downloadable!] (restricted)
    Other versions:
  4. Hartman, Raymond S. & Huq, Mainul & Wheeler, David, 1997. "Why paper mills clean up : determinants of pollution abatement in four Asian countries," Policy Research Working Paper Series 1710, The World Bank. [Downloadable!]
  5. Hua Wang & Wheeler, David, 1996. "Pricing industrial pollution in China : an econometric analysis of the levy system," Policy Research Working Paper Series 1644, The World Bank. [Downloadable!]
  6. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September. [Downloadable!] (restricted)
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  7. Regens, James L. & Seldon, Barry J. & Elliott, Euel, 1997. "Modeling compliance to environmental regulation: Evidence from manufacturing industries," Journal of Policy Modeling, Elsevier, vol. 19(6), pages 683-696, December. [Downloadable!] (restricted)
  8. Robert Tannenwald, 1997. "State regulatory policy and economic development," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 83-108. [Downloadable!]
  9. Hettige, Hemamala & Mani, Muthukumara & Wheeler, David, 2000. "Industrial pollution in economic development: the environmental Kuznets curve revisited," Journal of Development Economics, Elsevier, vol. 62(2), pages 445-476, August. [Downloadable!] (restricted)
  10. Cole, Matthew A. & Elliott, Robert J. R., 2003. "Determining the trade-environment composition effect: the role of capital, labor and environmental regulations," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 363-383, November. [Downloadable!] (restricted)
  11. Cole, Matthew A. & Elliott, Robert J.R. & Wu, Shanshan, 2008. "Industrial activity and the environment in China: An industry-level analysis," China Economic Review, Elsevier, vol. 19(3), pages 393-408, September. [Downloadable!] (restricted)
  12. Hartman, Raymond S & Wheeler, David & Singh, Manjula, 1997. "The Cost of Air Pollution Abatement," Applied Economics, Taylor and Francis Journals, vol. 29(6), pages 759-74, June. [Downloadable!] (restricted)
  13. McCONNELL, KENNETH E., 1997. "Income and the demand for environmental quality," Environment and Development Economics, Cambridge University Press, vol. 2(04), pages 383-399, November. [Downloadable!]
  14. Cole, Matthew A. & Elliott, Robert J.R. & Shimamoto, Kenichi, 2005. "Industrial characteristics, environmental regulations and air pollution: an analysis of the UK manufacturing sector," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 121-143, July. [Downloadable!] (restricted)
  15. Merlevede, Bruno & Verbeke, Tom & De Clercq, Marc, 2006. "The EKC for SO2: Does firm size matter?," Ecological Economics, Elsevier, vol. 59(4), pages 451-461, October. [Downloadable!] (restricted)
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