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Determinants of Cleaner Technology Investments in the U.S. Bleached Kraft Pulp Industry

Author

Listed:
  • Leigh J. Maynard
  • James S. Shortle

Abstract

This study identifies adoption determinants of selected cleaner technologies used in bleached kraft pulp production, with emphasis on incentives for voluntary environmental management. A double-hurdle model consistent with the theory of irreversible investment under uncertainty outperformed a probit specification, indicating the importance of option values as an adoption deterrent. Measures of public pressure for environmental performance, such as Toxics Release Inventory data and environmental group membership, were positively associated with cleaner technology adoption. The results suggest a role for environmental policy designs that accommodate the industry’ s private incentives while minimizing the value of waiting to adopt cleaner technologies.

Suggested Citation

  • Leigh J. Maynard & James S. Shortle, 2001. "Determinants of Cleaner Technology Investments in the U.S. Bleached Kraft Pulp Industry," Land Economics, University of Wisconsin Press, vol. 77(4), pages 561-576.
  • Handle: RePEc:uwp:landec:v:77:y:2001:i:4:p:561-576
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    References listed on IDEAS

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    1. Noel Blisard & James R. Blaylock, 1992. "A double-hurdle approach to advertising: The case of cheese," Agribusiness, John Wiley & Sons, Ltd., vol. 8(2), pages 109-120.
    2. Khanna, Madhu & Quimio, Wilma Rose H. & Bojilova, Dora, 1998. "Toxics Release Information: A Policy Tool for Environmental Protection," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 243-266, November.
    3. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    4. Konar, Shameek & Cohen, Mark A., 1997. "Information As Regulation: The Effect of Community Right to Know Laws on Toxic Emissions," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 109-124, January.
    5. 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.
    6. Karen Palmer & Wallace E. Oates & Paul R. Portney, 1995. "Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm?," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 119-132, Fall.
    7. Henriques, Irene & Sadorsky, Perry, 1996. "The Determinants of an Environmentally Responsive Firm: An Empirical Approach," Journal of Environmental Economics and Management, Elsevier, vol. 30(3), pages 381-395, May.
    8. Richards, Timothy J., 1996. "Economic Hysteresis And The Effects Of Output Regulation," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(01), July.
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    Citations

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    Cited by:

    1. Löfgren, Åsa & Millock, Katrin & Nauges, Céline, 2008. "The effect of uncertainty on pollution abatement investments: Measuring hurdle rates for Swedish industry," Resource and Energy Economics, Elsevier, vol. 30(4), pages 475-491, December.
    2. Earnhart, Dietrich & Segerson, Kathleen, 2012. "The influence of financial status on the effectiveness of environmental enforcement," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 670-684.
    3. Morgan, Cynthia & Pasurka, Carl & Shadbegian, Ron, 2014. "Ex ante and ex post cost estimates of the Cluster Rule and MACT II Rule," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 5(02), pages 195-224, June.
    4. Earnhart, Dietrich & Mark Leonard, J., 2016. "Environmental audits and signaling: The role of firm organizational structure," Resource and Energy Economics, Elsevier, vol. 44(C), pages 1-22.
    5. Hammar, Henrik & Löfgren, Åsa, 2007. "Explaining adoption of end of pipe solutions and clean technologies," Working Papers 102, National Institute of Economic Research.
    6. Löfgren, Åsa & Millock, Katrin & Nauges, Céline, 2007. "Using Ex Post Data to Estimate the Hurdle Rate of Abatement Investments - An Application to the Swedish Pulp and Paper Industry and Energy Sector," Working Papers in Economics 249, University of Gothenburg, Department of Economics.
    7. Dana C. Andersen, 2016. "Credit Constraints, Technology Upgrading, and the Environment," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(2), pages 283-319.
    8. Gray, Wayne B. & Shadbegian, Ronald J., 2015. "Multimedia Pollution Regulation and Environmental Performance: EPA’s Cluster Rule," Discussion Papers dp-15-26, Resources For the Future.
    9. repec:hal:journl:halshs-00343702 is not listed on IDEAS
    10. Andersen, Dana C., 2017. "Default Risk, Productivity, and the Environment: Theory and Evidence from U.S. Manufacturing," Working Papers 2017-8, University of Alberta, Department of Economics.
    11. repec:hal:journl:halshs-00261523 is not listed on IDEAS
    12. Li, Yi, 2017. "Voluntary disclosure and investment in environmental technology," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 331-341.
    13. repec:eee:jeeman:v:84:y:2017:i:c:p:189-208 is not listed on IDEAS
    14. Hammar, Henrik & Löfgren, Åsa, 2010. "Explaining adoption of end of pipe solutions and clean technologies--Determinants of firms' investments for reducing emissions to air in four sectors in Sweden," Energy Policy, Elsevier, vol. 38(7), pages 3644-3651, July.

    More about this item

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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