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Intel's XL Permit: A Framework for Evaluation

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  • Krupnick, Alan

    () (Resources for the Future)

  • Mazurek, Janice
  • Boyd, James

    () (Resources for the Future)

Abstract

The paper develops a framework to evaluate permits granted to firms under the Environmental Protection Agency's Project XL with emphasis on the novel air permit granted to the Intel Corporation. We describe the permit, the process that created it, and the types of costs and benefits likely to arise from this type of "facility-specific" regulatory arrangement. Among other things, the paper describes the permit's impact on environmental quality, production costs, transaction costs, and Intel's strategic market position. The paper also considers how an estimate of the costs and benefits both to Intel and society might be estimated. While facility-specific regulation typically conjures images of production cost savings as processes are re-engineered and low-cost abatement strategies pursued, the Intel case highlights perhaps a more important source of benefit: flexibility in the form of streamlined permitting. Flexibility in this form allows for accelerated product introductions, with potentially significant benefits to the firm and possibly to society.

Suggested Citation

  • Krupnick, Alan & Mazurek, Janice & Boyd, James, 1998. "Intel's XL Permit: A Framework for Evaluation," Discussion Papers dp-98-11, Resources For the Future.
  • Handle: RePEc:rff:dpaper:dp-98-11
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-98-11.pdf
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    References listed on IDEAS

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    1. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1120-1171, September.
    2. Gruber, Harald, 1992. "Persistence of Leadership in Product Innovation," Journal of Industrial Economics, Wiley Blackwell, vol. 40(4), pages 359-375, December.
    3. Kaldor, Nicholas, 1972. "The Irrelevance of Equilibrium Economics," Economic Journal, Royal Economic Society, vol. 82(328), pages 1237-1255, December.
    4. Buchanan, James M, 1969. "External Diseconomies, Corrective Taxes, and Market Structure," American Economic Review, American Economic Association, vol. 59(1), pages 174-177, March.
    5. Revesz, Richard L. & Stavins, Robert N., 2007. "Environmental Law," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 1, chapter 8, pages 499-589, Elsevier.
    6. Dick, Andrew R., 1994. "Accounting for semiconductor industry dynamics," International Journal of Industrial Organization, Elsevier, vol. 12(1), pages 35-51, March.
    7. Dick, Andrew R, 1991. "Learning by Doing and Dumping in the Semiconductor Industry," Journal of Law and Economics, University of Chicago Press, vol. 34(1), pages 133-159, April.
    8. A. M. Spence, 1981. "The Learning Curve and Competition," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 49-70, Spring.
    9. Drew Fudenberg & Jean Tirole, 1983. "Learning-by-Doing and Market Performance," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 522-530, Autumn.
    10. Gilbert, Richard J & Newbery, David M G, 1982. "Preemptive Patenting and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 72(3), pages 514-526, June.
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    Cited by:

    1. Pizer, William A. & Kopp, Raymond, 2005. "Calculating the Costs of Environmental Regulation," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 25, pages 1307-1351, Elsevier.
    2. Decker, Christopher S. & Pope, Christopher R., 2005. "Adherence to environmental law: the strategic complementarities of compliance decisions," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(4-5), pages 641-661, September.
    3. Delmas, Magali & Marcus, Alfred, 2003. "Firms' Choice of Regulation Instruments to Reduce Pollution: A Tansaction Cost Approach," Research Papers 1806, Stanford University, Graduate School of Business.

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