Economics

Plant vintage, technology, and environmental regulation

Document Type

Article

Abstract

We use data on productivity and pollution abatement costs at individual pulp and paper mills to test whether the impact of environmental regulation on productivity differs by plant vintage and technology. Plants with higher pollution abatement costs have significantly lower productivity levels. This relationship differs greatly based on a plant's technology, with productivity at integrated mills being greatly affected by abatement costs, while the impact at non-integrated mills is negligible. Plant vintage does not seem to matter, with older and newer plants showing similar impacts. Reported abatement costs appear to substantially understate the true costs of abatement. Accounting for the impact of technology differences makes some difference in the estimated overall impact of environmental regulation. © 2003 Elsevier Science (USA). All rights reserved.

Publication Title

Journal of Environmental Economics and Management

Publication Date

2003

Volume

46

Issue

3

First Page

384

Last Page

402

ISSN

0095-0696

DOI

10.1016/S0095-0696(03)00031-7

Keywords

environmental regulation, pollution abatement costs, productivity, pulp and paper industry

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