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Environmental Regulation, Abatement, and Productivity: A Frontier Analysis

  • Shital Sharma
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    This research studies the link between environmental regulation and plant level productivity in two U.S. manufacturing industries: pulp and paper mills and oil refineries using Data Envelopment Analysis (DEA) models. Data on abatement spending, emissions and abated emissions are used in different DEA models to study plant productivity outcomes when accounting for abatement spending or emissions regulations. Results indicate that pulp and paper mills and oil refineries in the U.S. suffered decreases in productivity due to pollution abatement activities from 1974 to 2000. These losses in productivity are substantial but have been slowly trending downwards even when the regulations have tended to become more stringent and emission of pollutants has declined suggesting that the best practice has shifted over time. Results also show that the reported abatement expenditures are not able to explain all the losses arising out of regulation suggesting that these abatement expenditures are consistently under-reported.

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    File URL: ftp://ftp2.census.gov/ces/wp/2013/CES-WP-13-51.pdf
    File Function: First version, 2013
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    Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 13-51.

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    Length: 35 pages
    Date of creation: Sep 2013
    Date of revision:
    Handle: RePEc:cen:wpaper:13-51
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