Economics

'Optimal' pollution abatement-whose benefits matter, and how much?

Document Type

Article

Abstract

We examine the determinants of environmental regulatory activity (inspections and enforcement actions) and levels of air and water pollution for 409 US pulp and paper mills, using data for 1985-1997. We focus on the benefits to the surrounding population from pollution abatement. Plants with larger benefits emit less pollution, as do those with more kids and elders nearby. Plants in poor areas emit more pollution, though (surprisingly) we find less pollution in minority areas. Out-of-state neighbors seem to count less than in-state ones, although this effect diminishes if the bordering state's Congressional delegation is strongly pro-environment. We use 'spatially lagged' instrumental variables to control for the potential endogeneity of which individuals choose to locate near the plant. The results for regulatory activity are noticeably less significant than the emissions results.

Publication Title

Spatial Aspects of Environmental Policy

Publication Date

5-2004

Volume

47

Issue

3

First Page

510

Last Page

534

ISSN

1096-0449

DOI

10.1016/j.jeem.2003.01.001

Keywords

demographics, enforcement, environmental justice, regulation

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