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The impact of voluntary programs on polluting behavior: Evidence from pollution prevention programs and toxic releases

  • Bui, Linda T.M.
  • Kapon, Samuel

We investigate how a class of voluntary environmental initiatives known as pollution prevention (“P2”) programs affect toxic pollution. We construct a data base of 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 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.

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Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 64 (2012)
Issue (Month): 1 ()
Pages: 31-44

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Handle: RePEc:eee:jeeman:v:64:y:2012:i:1:p:31-44
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622870

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  1. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
  2. Maxwell, John W & Lyon, Thomas P & Hackett, Steven C, 2000. "Self-Regulation and Social Welfare: The Political Economy of Corporate Environmentalism," Journal of Law and Economics, University of Chicago Press, vol. 43(2), pages 583-617, October.
  3. Thomas P. Lyon & John W. Maxwell, 2008. "Corporate Social Responsibility and the Environment: A Theoretical Perspective," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 240-260, Summer.
  4. Barla, Philippe, 2005. "ISO 14001 Certification and Environmental Performance in Quebec's Pulp and Paper Industry," Cahiers de recherche 0503, Université Laval - Département d'économique.
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  7. Khanna, Madhu & Damon, Lisa A., 1999. "EPA's Voluntary 33/50 Program: Impact on Toxic Releases and Economic Performance of Firms," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 1-25, January.
  8. Brouhle, Keith & Griffiths, Charles & Wolverton, Ann, 2009. "Evaluating the role of EPA policy levers: An examination of a voluntary program and regulatory threat in the metal-finishing industry," Journal of Environmental Economics and Management, Elsevier, vol. 57(2), pages 166-181, March.
  9. Linda T. M. Bui & Christopher J. Mayer, 2003. "Regulation and Capitalization of Environmental Amenities: Evidence from the Toxic Release Inventory in Massachusetts," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 693-708, August.
  10. Madhu Khanna & George Deltas & Donna Harrington, 2009. "Adoption of Pollution Prevention Techniques: The Role of Management Systems and Regulatory Pressures," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 44(1), pages 85-106, September.
  11. Vidovic, Martina & Khanna, Neha, 2007. "Can voluntary pollution prevention programs fulfill their promises? Further evidence from the EPA's 33/50 Program," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 180-195, March.
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  14. Gamper-Rabindran, Shanti, 2006. "Did the EPA's voluntary industrial toxics program reduce emissions? A GIS analysis of distributional impacts and by-media analysis of substitution," Journal of Environmental Economics and Management, Elsevier, vol. 52(1), pages 391-410, July.
  15. David P. Baron, 2001. "Private Politics, Corporate Social Responsibility, and Integrated Strategy," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(1), pages 7-45, 03.
  16. Arora, Seema & Gangopadhyay, Shubhashis, 1995. "Toward a theoretical model of voluntary overcompliance," Journal of Economic Behavior & Organization, Elsevier, vol. 28(3), pages 289-309, December.
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