Grantee Research Project Results
2004 Progress Report: Regulating Pollution Through Information Disclosure: Facility Response to the Toxics Release Inventory
EPA Grant Number: R829689Title: Regulating Pollution Through Information Disclosure: Facility Response to the Toxics Release Inventory
Investigators: Stavins, Robert N. , Miller, Nolan
Institution: Harvard University
EPA Project Officer: Hahn, Intaek
Project Period: July 1, 2002 through June 30, 2005 (Extended to June 30, 2006)
Project Period Covered by this Report: July 1, 2004 through June 30, 2005
Project Amount: $396,235
RFA: Corporate Environmental Behavior: Examining the Effectiveness of Government Interventions and Voluntary Initiatives (2001) RFA Text | Recipients Lists
Research Category: Environmental Justice
Objective:
There is increasing interest in the United States and other countries in the role that information disclosure program can play as substitutes or complements for conventional command-and-control or market-based environmental policy instruments. The primary purpose of this research project is to analyze the efficacy of such information disclosure programs by examining the ways in which these programs can – in theory – affect environmental quality and by empirically investigating how information disclosure programs have actually affected pollutant releases. The revised research plan, approved by the U.S. Environmental Protection Agency (EPA) during Year 1 of the grant, capitalizes on variations in state-level toxics use and release reporting requirements established as part of several states’ pollution prevention programs to identify the causal effects of disclosure and planning requirements on toxics release levels and source reduction activities, and other strategic responses.
Progress Summary:
Data analysis was completed on the research plan during Year 3. The analysis resulted in three papers, which are being prepared for publication. The first paper, “Are Management-Based Regulations Effective?: Evidence from State Pollution Prevention Programs,” evaluates the effectiveness of management-based regulations (MBRs) in reducing pollution. MBRs do not establish strict pollution reduction standards, but rather require each regulated entity to engage in its own review and planning process and develop a set of internal rules and initiatives consistent with achieving reductions in pollution. We evaluated the effectiveness of MBR empirically by taking advantage of a natural policy experiment that occurred when 14 states adopted such regulations for toxic chemical control in the 1990s. Using panel data for just over 31,000 manufacturing plants in the United States, we investigated whether facilities subject to MBRs had larger changes in total quantities of toxic chemical releases, engaged in more pollution prevention activities, or reported fewer toxic chemicals to the Toxics Release Inventory (TRI). The analysis suggests that MBR has had a measurable positive effect on the environmental performance of manufacturing plants. In particular, plants subject to MBR experienced larger decreases in total pounds of toxic chemicals released and were more likely to engage in source reduction activities.
The second paper, “Evaluating Management-Based Regulations: A Valuable Tool In The Regulatory Tool Box?,” contains a less technical treatment of our analysis on MBR. This paper focuses on two important sets of questions. First, do MBRs actually work? Second, assuming MBR does work, under what circumstances does it work better than other regulatory alternatives? More specifically, when does MBR attain a given level of risk reduction at lower cost than other policy alternatives, where cost includes both the cost of compliance by the regulated entities and the cost of implementation and enforcement by regulators? The evidence on effectiveness draws on the results from the first paper. The unique contribution of this paper is an investigation of the circumstances under which MBR is likely to be more cost-effective than other regulatory instruments. We develop a model that suggests that MBR is likely to be more cost-effective when: (1) there is a large degree of heterogeneity in the population of regulated entities, (2) the risk being regulated is not easily measurable, (3) traditional regulations would impose high information burdens on the regulatory agency, and (4) there is some uncertainty about the extent of the risk being regulated.
The final paper, “Strategic Response to Regulatory Thresholds: Evidence from the Massachusetts Toxics Use Reduction Act,” examines the response to reporting thresholds present in many “right-to-know” initiatives using data from the Massachusetts Toxics Use Reduction Act (TURA). The results of the analysis suggest that the bias introduced by the reporting thresholds may be significant. Up to 40 percent of the observed decline in TRI releases in Massachusetts may be attributed to truncation at the reporting thresholds. In addition, quartile rankings of facilities based on reported releases may be in error 45 percent of the time when behavior around the reporting thresholds is not taken into account. Because the regulatory thresholds for TURA are similar to many other state and federal right-to-know programs, including the widely used TRI, the fact that strategic responses to regulatory thresholds in TURA are significant suggests that such strategic responses may affect validity of environmental “right-to-know” data more broadly. Results of this work have been presented at several conferences including the EPA Science Forum in the fall of 2005.
Future Activities:
The papers currently are being revised for publication in peer-reviewed journals.
Journal Articles:
No journal articles submitted with this report: View all 16 publications for this projectSupplemental Keywords:
regulation, behavioral responses to regulation, public policy, state-level environmental policy, Massachusetts, MA, program evaluation,, RFA, Scientific Discipline, Sustainable Industry/Business, Corporate Performance, Economics and Business, Social Science, environmental performance, community involvement, corporate environmental policy, policy making, toxic release inventory, plant emissions, information dissemination, public reporting, community relations, right-to-know programs, environmental management strategies, green technologyProgress and Final Reports:
Original AbstractThe perspectives, information and conclusions conveyed in research project abstracts, progress reports, final reports, journal abstracts and journal publications convey the viewpoints of the principal investigator and may not represent the views and policies of ORD and EPA. Conclusions drawn by the principal investigators have not been reviewed by the Agency.