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Measuring Environmental Regulatory Stringency

  • Claire Brunel
  • Arik Levinson

Researchers have long been interested in whether environmental regulations discourage investment, reduce labour demand, or alter patterns of international trade. But estimating those consequences of regulations requires devising a means of measuring their stringency empirically. While creating such a measure is often portrayed as a data-collection problem, we identify four fundamental conceptual obstacles, which we label multidimensionality, simultaneity, industrial composition, and capital vintage. We then describe the long history of attempts to measure environmental regulatory stringency, and assess their relative success in light of those obstacles. Finally, we propose a new measure of stringency that would be based on emissions data and could be constructed separately for different pollutants.

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Paper provided by OECD Publishing in its series OECD Trade and Environment Working Papers with number 2013/5.

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Date of creation: 22 Aug 2013
Date of revision:
Handle: RePEc:oec:traaaa:2013/5-en
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  1. Broner, Fernando A & Bustos, Paula & Carvalho, Vasco M, 2012. "Sources of Comparative Advantage in Polluting Industries," CEPR Discussion Papers 9111, C.E.P.R. Discussion Papers.
  2. Deborah Aiken & Rolf Färe & Shawna Grosskopf & Carl Pasurka, 2009. "Pollution Abatement and Productivity Growth: Evidence from Germany, Japan, the Netherlands, and the United States," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 44(1), pages 11-28, September.
  3. Eli Berman & Linda T.M. Bui, 1998. "Environmental Regulation and Productivity: Evidence from Oil Refineries," Papers 0091, Boston University - Industry Studies Programme.
  4. Randy Becker, 2001. "Air Pollution Abatement Costs Under the Clean Air Act: Evidence from the PACE Survey," Working Papers 01-12, Center for Economic Studies, U.S. Census Bureau.
  5. Randy Becker & Vernon Henderson, 2000. "Effects of Air Quality Regulations on Polluting Industries," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 379-421, April.
  6. Buchanan, James M & Tullock, Gordon, 1975. "Polluters' Profits and Political Response: Direct Controls Versus Taxes," American Economic Review, American Economic Association, vol. 65(1), pages 139-47, March.
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