Economics

Enforcement of pollution regulations in a declining industry

Document Type

Book Chapter

Abstract

A regulatory agency enforcing compliance in a declining industry might recognize that certain plants would close rather than comply, imposing large costs on the local community. Data on EPA enforcement activity in the U.S. steel industry are examined for evidence of this with a two-equation model linking EPA enforcement decisions and firms' plant-closing decisions. The results indicate that the EPA directed fewer enforcement actions toward plants with a high predicted probability of closing and plants that were major employers in their community; also, plants predicted to face relatively heavy enforcement were more likely to close.

Publication Title

Economic Costs and Consequences of Environmental Regulation

Publication Date

2002

First Page

335

Last Page

350

ISBN

9781315188010

DOI

10.4324/9781315188010

Keywords

pollution regulation, environmental regulation

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