Grantee Research Project Results
1999 Progress Report: Environmental Regulation and Productivity Benefits in the Paper Industry
EPA Grant Number: R826155Title: Environmental Regulation and Productivity Benefits in the Paper Industry
Investigators: Gray, Wayne B. , Shadbegian, Ronald J.
Institution: Clark University
EPA Project Officer: Chung, Serena
Project Period: October 1, 1997 through September 30, 2000
Project Period Covered by this Report: October 1, 1998 through September 30, 1999
Project Amount: $300,000
RFA: Exploratory Research - Social Science (1997) RFA Text | Recipients Lists
Research Category: Environmental Justice
Objective:
This project examines productivity in the paper industry, combining plant-level production and cost data, pollution emissions, and demographic data to calculate a broadly defined measure of productivity at each plant, incorporating the benefits from reduced pollution exposure. These data allow us to compare the costs and benefits of pollution regulation in a productivity framework. We use data on the production and abatement technologies used at each plant to help explain differences in productivity across plants, as well as changes over time.Progress Summary:
Most of the second year of the grant was devoted to completing the plant-level database. We used various industry directories to gather data on each plant. The plant-level database identifies the products produced by the plant, and the plant's overall production capacity. It includes information on the production technology in use at the plant, especially whether or not it has its own pulping facility, what type of pulping processes it uses, and the pulping capacity. The database has information on water usage, discharges, and treatment facilities. Because we have directory data from many years (going back to 1960), we can infer something about the plant's age from when it first enters the directory. In addition, we have the plant's name and address, and information about its corporate ownership.We developed linkages from these data to a number of additional databases, giving further information. We linked our plant list to several EPA databases, providing sources of data on water pollution (PCS), air pollution (AIRS), and toxic waste (TRI). We also calculated each plant's exact location (taken from EPA data sets and from commercially available mapping software), and used it to link the dataset to demographic data from the Census of Population, giving us the population density near plant. This enabled us to calculate the number of people that would be exposed to local air and water pollution from the plant.
This extended database allowed us to achieve a major goal of our research, by giving us a measure of the benefits associated with reductions in pollution at each plant. For some pollutants, particularly air pollution, we have measures of current emissions and of the efficiency of the control equipment in use at the plant, so we can project what emissions at the plant would have been in the absence of the control equipment. For other pollutants, we base our estimated pollution reductions on an engineering study that calculated reductions in pollution at a typical paper mill that could be attributed to compliance with the Clean Air and Clean Water Acts, separately for different types of pulping processes. We combined the estimated pollution reduction at each plant, the nearby population density, and dollar measures of the benefits from reducing exposure to pollutants to come up with an overall measure of the benefits from reduction in pollution at each plant.
Our first research paper using the benefits data ("Spatial Efficiency of Pollution Abatement Expenditures") tests whether the differences across plants in their pollution abatement costs can be explained by differences in the benefits from their pollution reductions. An efficient allocation of abatement costs should have plants where emission reductions are especially valuable (either because of an especially dirty production technology or especially high population densities nearby) being required to do more pollution abatement. Thus, high-benefit plants should have correspondingly higher pollution abatement costs. We combined our benefits data with plant-level pollution abatement expenditures data from the Census Bureau's Pollution Abatement Costs and Expenditures survey (working at the Census Bureau), and compared the costs and benefits. We found that plant-level costs were related to the benefits from abatement, as expected, with higher-benefit plants having higher abatement costs. However, the differences in abatement costs across plants were not as sensitive to differences in benefits as we would have expected if the allocation of expenditures were perfectly efficient. This could be due to a desire on the part of regulators to have uniform standards for different plants in the same industry, regardless of their location, but suggests that there are some efficiency costs to achieving this uniformity of standards.
Future Activities:
We will finish updating the "benefits from pollution abatement" numbers, incorporating more complete plant-specific information. For water pollution, we will consider the incremental impact of the plant's discharges on the receiving waterway. For air pollution, we will give some consideration to the interactions between different pollutants in the atmosphere. Once these numbers are updated, we will revise our "Spatial Efficiency" paper (we are scheduled to present an updated version at a Harvard University seminar in Spring 2000).We also will use the updated benefits numbers in two other papers. One will be a sort of plant-level benefit-cost analysis, using an expanded measure of productivity. This will incorporate the dollar benefits from pollution abatement as one of the "outputs" from the plant, potentially offsetting the costs from pollution abatement, which are already counted in traditional productivity measures. We can see how many plants have benefits from pollution abatement that exceed their costs, and also aggregate the data across plants to provide an overall benefit-cost analysis for the industry.
The other paper will examine the connections between changes in technology and reduction in pollution over time. This will use the plant-level production and abatement technology information, identifying changes in technology at particular plants, and seeing whether it is linked to changes in pollution emissions at the plant. Of particular interest will be comparing the magnitudes of emission reductions arising from shifts in technology with reductions arising from the use of traditional end-of-pipe abatement methods.
Journal Articles:
No journal articles submitted with this report: View all 14 publications for this projectSupplemental Keywords:
regulatory impact, productivity, benefits analysis, pulp and paper industry, SIC 2611, SIC 2621, public policy., RFA, Scientific Discipline, Economic, Social, & Behavioral Science Research Program, Economics, Economics and Business, decision-making, Social Science, Economics & Decision Making, ecosystem valuation, emission levels, decision making, economic benefits, measuring benefits, environmental values, cost of pollution abatement, cost/benefit analysis, environmental policy, health valuation models, compliance costs, regulatory impact, benefits assessmentProgress 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.