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The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing

  • Lori D. Snyder
  • Nolan H. Miller
  • Robert N. Stavins

We use a hazard model to estimate the effect of environmental regulation on the diffusion of membrane cell production technology in the chlorine manufacturing industry. We estimate the effect of regulation on both the adoption of the membrane technology at existing plants and on the exit of existing plants using older technologies. We find that environmental regulation did affect the diffusion of the cleaner technology in the chlorine industry. However, it did so not by encouraging the adoption of membrane cells by existing facilities, but by reducing the demand for chlorine and hence encouraging the shutdown of facilities using the environmentally inferior options.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/000282803321947470
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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 93 (2003)
Issue (Month): 2 (May)
Pages: 431-435

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Handle: RePEc:aea:aecrev:v:93:y:2003:i:2:p:431-435
Note: DOI: 10.1257/000282803321947470
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  1. Snyder, Lori & Miller, Nolan & Stavins, Robert, 2003. "The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing," Working Paper Series rwp03-014, Harvard University, John F. Kennedy School of Government.
  2. Stavins, Robert & Jaffe, Adam & Newell, Richard, 2000. "Technological Change and the Environment," Discussion Papers dp-00-47, Resources For the Future.
  3. Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1998. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," NBER Working Papers 6437, National Bureau of Economic Research, Inc.
  4. Suzi Kerr & Richard G. Newell, 2003. "Policy-Induced Technology Adoption: Evidence from the U.S. Lead Phasedown," Journal of Industrial Economics, Wiley Blackwell, vol. 51(3), pages 317-343, 09.
  5. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-79, June.
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