IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/30842.html

Internalizing Externalities through Public Pressure: Transparency Regulation for Fracking and Water Quality

Author

Listed:
  • Pietro Bonetti
  • Christian Leuz
  • Giovanna Michelon

Abstract

Responding to the rise of hydraulic fracturing (HF) and risks to water quality, U.S. states mandated disclosure for HF wells. We study whether and how such targeting of corporate externalities with transparency regulation reduces environmental impact. We examine salt concentrations considered HF signatures and find significant reductions in surface water impact between 9-17%, mostly along the intensive margin. Consistent with these findings, we document improvements in operator practices, including fewer wastewater spills. We unpack the transparency mechanism and show that transparency regulation enables social movements and increases public pressure, which in turn drives the documented changes in practices and water quality.

Suggested Citation

  • Pietro Bonetti & Christian Leuz & Giovanna Michelon, 2023. "Internalizing Externalities through Public Pressure: Transparency Regulation for Fracking and Water Quality," NBER Working Papers 30842, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30842
    Note: CF EEE POL
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w30842.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alexander, Anna & De Vito, Antonio & Menicacci, Luca, 2024. "At what cost? Environmental regulation and corporate cash holdings," Finance Research Letters, Elsevier, vol. 61(C).

    More about this item

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:30842. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.