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

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  • 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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    2. 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.
    3. LOFGREN Asa & 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," LERNA Working Papers 07.06.227, LERNA, University of Toulouse.
    4. Åsa L�fgren & Markus Wr�ke & Tomas Hagberg & Susanna Roth, 2014. "Why the EU ETS needs reforming: an empirical analysis of the impact on company investments," Climate Policy, Taylor & Francis Journals, vol. 14(5), pages 537-558, September.
    5. 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.
    6. 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(2), pages 195-224, June.
    7. Morgan, Cynthia & Pasurka, Carl & Shadbegian, Ron & Belova, Anna & Casey, Brendan, 2023. "Estimating the cost of environmental regulations and technological change with limited information," Ecological Economics, Elsevier, vol. 204(PA).
    8. Hammar, Henrik & Löfgren, Åsa, 2007. "Explaining adoption of end of pipe solutions and clean technologies," Working Papers 102, National Institute of Economic Research.
    9. Juraj Šebo & Miriam Šebová & Iztok Palčič, 2021. "Implementation of Circular Economy Technologies: An Empirical Study of Slovak and Slovenian Manufacturing Companies," Sustainability, MDPI, vol. 13(22), pages 1-17, November.
    10. Silva, Elvira & Magalhães, Manuela, 2023. "Environmental efficiency, irreversibility and the shadow price of emissions," European Journal of Operational Research, Elsevier, vol. 306(2), pages 955-967.
    11. 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.
    12. Andersen, Dana C., 2017. "Do credit constraints favor dirty production? Theory and plant-level evidence," Journal of Environmental Economics and Management, Elsevier, vol. 84(C), pages 189-208.
    13. Åsa Löfgren & Katrin Millock & Céline Nauges, 2008. "Using ex post data to estimate the hurdle rate of abatement investments - an application to sulfur emissions from the Swedish pulp and paper industry and energy sector," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00261523, HAL.
    14. 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.
    15. Dana C. Andersen, 2020. "Default Risk, Productivity, and the Environment: Theory and Evidence from U.S. Manufacturing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(4), pages 677-710, April.
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    18. 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.

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    JEL classification:

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

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