Grantee Research Project Results
2003 Progress Report: Shaping Corporate Environmental Behavior and Performance: The Impact of Enforcement and Non-Enforcement Tools
EPA Grant Number: R828828Title: Shaping Corporate Environmental Behavior and Performance: The Impact of Enforcement and Non-Enforcement Tools
Investigators: Earnhart, Dietrich H. , Haider-Markel, Donald , Glicksman, Robert , Ebihara, Tatsuji
Institution: University of Kansas
EPA Project Officer: Hahn, Intaek
Project Period: March 12, 2001 through March 11, 2004 (Extended to December 11, 2005)
Project Period Covered by this Report: March 12, 2003 through March 11, 2004
Project Amount: $341,234
RFA: Corporate Environmental Performance and the Effectiveness of Government Interventions (2000) RFA Text | Recipients Lists
Research Category: Environmental Justice
Objective:
The overarching objective of this research project is to determine and isolate the effects of certain government interventions on corporate environmental behavior and performance (CEBP) at individual facilities in the industrial sector of chemical and allied products. We measure environmental behavior by the extent of treatment, auditing, and an environmental management system (EMS). We measure environmental performance by the level of wastewater discharges in absolute terms and relative to effluent limits. From this overarching objective, we identify seven specific objectives:
Objective 1: Identify the differential effects of government interventions on CEBP.
Objective 2: Identify the effects of general deterrence and enforcement approach on CEBP.
Objective 3: Test empirically the theoretical understanding of specific deterrence.
Objective 4: Identify the interactions between the effects of government interventions and facility characteristics, especially the status as a major or minor discharger.
Objective 5: Explore the influence of EMS protocols on environmental performance.
Objective 6: Explore the influence of community pressure on CEBP.
Objective 7: Explore the influence of financial status on CEBP.
Progress Summary:
To achieve Objective 1, Identify the Differential Effects of Government Interventions on CEBP, we have completed the following tasks:
- Merged two data sources on federal enforcement actions, the Permit Compliance System (PCS) database and the Docket database.
- Organized these merged data to generate various measures of federal enforcement-related specific deterrence (e.g., federal fines imposed in preceding 12-month period).
- Performed multivariate analysis on biological oxygen demand (BOD) and total suspended solids (TSS) discharges with and without reference to effluent limits (i.e., absolute discharges and relative discharges [“compliance levels”]), to examine the influence of specific deterrence on corporate environmental performance.
- Statistically tested the different effects of various types of specific deterrence.
- Organized our survey responses on environmental behavior: (1) wastewater treatment process; (2) authentication of ISO 14000; (3) auditing frequency/scope; (4) facility environmental full-time equivalent (FTE) staff and degree of professional training; and (5) total budget for external consulting staff.
- Performed multivariate analysis on the presence of monthly BOD discharge values and presence of TSS discharge values as part of the Heckman sample selection correction procedure.
- Compiled and reviewed additional legal literature on what motivates corporate compliance with environmental regulations and, particularly, how regulated entities respond to different government interventions.
- Interviewed U.S. Environmental Protection Agency (EPA) enforcement personnel in both the headquarters and regional offices to clarify the manner in which the Clean Water Act’s civil enforcement process works.
To achieve Objective 2, Identify the Effects of General Deterrence and Enforcement Approach on CEBP, we have completed the following tasks:
- Merged sector-specific data on additional measures of general deterrence based on federal enforcement actions from two databases, the PCS database and the Docket database.
- Formatted information on water budgets for state environmental agencies to generate regressors used in multivariate analysis of environmental performance measures.
- Examined survey responses to questions that distinguish overall enforcement approach, cooperative versus coercive.
- Performed multivariate analysis on BOD and TSS discharges to examine the influence of general deterrence on corporate environmental performance.
- Statistically tested the different effects of various types of general deterrence.
- Compiled and reviewed additional legal literature on the relative effectiveness of the coercive and cooperative approaches to enforcement of environmental regulations.
To achieve Objective 3, Test Empirically the Theoretical Understanding of Specific Deterrence, we scrutinized the survey responses relating to the hypothetical scenarios designed to generate stated behavior data on responses to the imposition of penalties that vary in size and likelihood.
To achieve Objective 4, Identify the Interactions Between the Effects of Government Interventions and Facility Characteristics, Especially the Status as a Major or Minor Discharger, we have completed the following tasks:
- Performed multivariate analysis on BOD and TSS discharges to identify the interactions between the effects of government interventions on environmental performance and facility characteristics.
- Organized the survey responses to questions on other facility characteristics: (1) number of years in operation; (2) employment level; (3) firm ownership structure; (4) annual total product output; and (5) corporate environmental FTE staff.
To achieve Objective 5, Explore the Influence of Ems Protocols on Environmental Performance, we have completed the following tasks:
- Organized the survey responses to questions on the following EMS factors: (1) communication of management’s environmental compliance targets to plant staff; (2) level of employee participation in identifying and correcting potential non-compliance; (3) conformance to standard compliance audit protocols; and (4) degree of access to internal and/or external compliance assistance resources.
- Performed analysis on the relationship between environmental performance and audit practices.
To achieve Objective 6, Explore the Influence of Community Pressure on CEBP, we have completed the following tasks:
- Formatted all information on community characteristics using locale-level (e.g., village) Census data and county-level Commerce Department Regional Economic Information Service data in order to generate regressors for use in multivariate analysis.
- Performed multivariate analysis on BOD and TSS discharges to examine the influence of community pressure, using community characteristic proxies, on environmental performance.
- Utilized multivariate analysis to identify the influence of community pressure on environmental behavior based on community characteristic proxies.
- Organized and scrutinized the survey responses to questions to probe managerial perspectives on community pressure and facilities’ environmental standing in the local community.
To achieve Objective 7, Explore the Influence of Financial Status on CEBP, we performed multivariate analysis on BOD and TSS discharges to examine the influence of financial status on corporate environmental performance.
Future Activities:
During Year 4 of the project, we will:
- Re-organize the survey responses to facilitate more meaningful analysis.
- Fully organize the state penalty data while generating measures of state enforcement-related specific deterrence and general deterrence for multivariate analysis.
- Perform multivariate analysis on the monthly count of effluent limit exceedances to examine the influence of specific and general deterrence on environmental performance to identify the interactions between government interventions and facility characteristics and to examine the influence of community pressure on environmental performance.
- Perform multivariate analysis on environmental performance in the four states selected for comparison between state penalties and penalties in terms of both specific and general deterrence while statistically testing the different effects of state and federal penalties; and
- Perform multivariate analysis on environmental performance of facilities owned by publicly held firms to examine the influence of financial status on environmental performance and to identify the interactions between the effects of government interventions and financial status.
Journal Articles:
No journal articles submitted with this report: View all 15 publications for this projectSupplemental Keywords:
water, discharge, survey, socioeconomic, enforcement, monitoring, engineering, law, chemical and allied products, Heckman two-stage estimation, EMS, air and water pollution regulations, compliance assistance, corporate compliance, corporate environmental behavior, decision-making, deterrence, economic incentives, enforcement, enforcement impact, enforcement strategy, environmental behavior, environmental compliance determinants, environmental decision-making, environmental management systems, environmental performance, environmental policy, government intervention, incentives, legal and policy choices, motivators, policy analysis, policy making, public policy, regulations, regulatory impact,, RFA, Economic, Social, & Behavioral Science Research Program, Scientific Discipline, Sustainable Industry/Business, Economics, Corporate Performance, Economics and Business, decision-making, Social Science, Economics & Decision Making, Environmental Law, environmental performance, SEPs, environmental management systems (EMS), policy analysis, deterrence, compliance assistance, enforcement strategy, policy making, government intervention, incentives, decision making, environmental decision making, corporate compliance, environmental compliance determinants, socioeconomics, economic incentives, enforcement, environmental policy, air & water pollution regulations, Laws, environmental behavior, regulations, enforcement impact, EMS, legal and policy choices, public policy, regulatory impact, corporate environmental behaviorProgress 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.