Grantee Research Project Results
2002 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, 2002 through June 30, 2003
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 potential role that can be played by information disclosure programs as substitutes or complements for conventional command-and-control or market-based environmental policy instruments. Much of this interest can be attributed to the apparent success of the Toxics Release Inventory (TRI) program, which requires large manufacturing facilities to report publicly their annual releases of certain chemicals. Since the inception of the TRI program in 1986, reported releases of more than 300 regulated chemicals have fallen by more than 45 percent. The primary purpose of this research is to analyze the efficacy of such information disclosure programs by examining the ways in which these programs theoretically can affect environmental quality, and by investigating empirically the ways in which information disclosure programs have actually affected pollutant releases.
Progress Summary:
During Year 1 of the project, the research team submitted a proposal to the U.S. Bureau of the Census requesting access to the Longitudinal Research Database (LRD). Because of significant delays in approval of this proposal by the Internal Revenue Service, the team examined alternative estimation strategies that would not rely on Census data. A revision to the grant proposal was submitted and approved by the U.S. Environmental Protection Agency (EPA). As part of the revised research, the team examined the effect of TRI and other regulatory programs on technology adoption in the chlorine manufacturing industry. A paper, coauthored by Drs. Stavins, Miller, and Snyder (a Ph.D. research fellow), was presented at the annual meetings of the American Economics Association and published in the papers and proceedings issue of the American Economic Review in May 2003. The team also began a study of state-level regulations that require systematic pollution prevention planning and disclosure of pollution prevention information to regulators and, in some cases, the broader public.
Results
As part of the revised research, the team examined the effect of TRI and other regulatory programs on technology adoption in the chlorine manufacturing industry. We examine the effect of regulation on technological change in the chlorine manufacturing industry by focusing on the diffusion of membrane cell technology, widely viewed as environmentally superior to both mercury cell and diaphragm cell technologies. The chlorine manufacturing industry has experienced a substantial shift over time towards the membrane technology, but only a relatively small fraction of this change has come about through adoption of cleaner technologies at existing plants. Most of the change has resulted from the use of membrane cells by newly constructed facilities (entry) and the closing of facilities using diaphragm and mercury cells (exit). Therefore, in this context, technology diffusion can be viewed as a combination of adoption, entry, and exit decisions.
The research team examined econometrically two of these aspects of diffusion—adoption and exit behavior—to assess the effects of environmental regulation. Employing plant-level data on technology choice, economic variables, and regulatory variables from 1976 to 2001, we examined these adoption and exit decisions with a hazard model, considering the effects of both direct regulation of chlorine manufacturing and regulation of downstream users of chlorine.
We found that environmental regulation had an effect on technological change, but not in the way that many advocates would argue. Direct regulation of chlorine manufacturing did not have a statistically significant effect on adoption of membrane technology by existing plants; however, regulation of downstream uses of chlorine changed the demand for chlorine, causing plants which disproportionately used the older, less environmentally sound technologies to close. In this way, regulations increased over time the share of plants using the cleaner, membrane technology. This pattern, in which environmental regulations have their greatest influence on technology diffusion through systematic effects on exit (and effects on adoption at time of entry) rather than effects on adoption at existing plants, is consistent with previous findings regarding technology innovation.
Data on state programs were gathered from the National Pollution Prevention Roundtable and confirmed using state Web sites and telephone conversations with state program directors. Data on environmental performance were collected from the TRI and the Biennial Reporting System (BRS), both maintained by EPA. Data on additional regulations, such as National Emissions Standards for Hazardous Air Pollutants (NESHAPS) were culled from EPA development documents for each regulation and merged with the existing data from TRI and BRS. Data on facility-specific, demographic, political, and economic characteristics were taken from the SRI Directory of Chemical Producers, the League of Conservation Voters Annual Scorecard for Congressional representatives, 1990 Census data, and the Bureau of Labor Statistics. By the end of Year 1 of the project, these data were merged, cleaned, and ready to be used in data analysis. The team has maintained a detailed data-cleaning log that describes the methods used to merge data from different sources, identify plants in data sets using different identification numbers, and record how discrepancies were resolved. This data log will be submitted to EPA at the completion of the research project. We anticipate that this log will be useful to future researchers in simplifying their data merging and cleaning efforts. It also may be useful to EPA for identifying ways of improving data collection, access, cross-media comparability, etc.
Future Activities:
During Year 2 of the project, the research team will continue to examine the effectiveness of information disclosure using variation provided by differences in state pollution prevention programs. Using panel data for more than 5,500 chemical manufacturing plants in the United States, the team will investigate whether facilities subject to mandatory planning requirements had larger changes in total quantities of toxic chemical air emissions, engaged in more pollution prevention activities, or were more likely to reduce their use of toxic chemicals below the levels that require reporting. The research will control for other factors that might explain differences in environmental performance, including differences in plant and firm-level characteristics, differences in other regulatory regimes, differences in environmental preferences of state residents, and temporal changes that are not related to the policy programs. The team also is examining the possibility of using information from EPA’s Risk Screening Environmental Indicators (RSEI) model to evaluate whether these regulations have had an effect on risk levels, rather than simply on pounds of chemicals released. The team has requested a copy of the current RSEI model from EPA and will examine the data and models to determine if they can provide a useful extension of current work. The team recently received approval to use Census LRD and also will investigate facility financial data.
Journal Articles on this Report : 1 Displayed | Download in RIS Format
Other project views: | All 16 publications | 3 publications in selected types | All 2 journal articles |
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Snyder LD, Miller NH, Stavins RN. The effects of environmental regulation on technology diffusion: the case of chlorine manufacturing. The American Economic Review 2003;93(2):431-435. |
R829689 (2002) R829689 (Final) |
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Supplemental Keywords:
social science, public policy, public good, SIC 28, community based, sustainable industry, sustainable business, corporate, performance, economics and business, social science, community involvement, community relations, corporate environmental policy, environmental management strategies, environmental performance, green technology, information dissemination, motivators, plant emissions, policymaking, public reporting, right-to-know programs., 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.