Essays on facility-level response to environmental regulation (Massachusetts)

This dissertation presents three essays on facility-level response to environmental regulation. The first essay evaluates the effectiveness of management-based regulations in reducing pollution. Management-based regulations do not establish strict pollution reduction standards, but rather require each regulated entity to engage in its own review and planning process and develop a set of internal rules and initiatives consistent with achieving reductions in pollution. The analysis suggests that management-based regulation has had a measurable positive effect on the environmental performance of manufacturing plants. In particular, plants subject to management-based regulation experienced larger decreases in total pounds of toxic chemicals released and were more likely to engage in source reduction activities.; The second essay examines the effect of arbitrary reporting thresholds on the validity of facility-reported pollution releases to the Toxics Release Inventory (TRI). Using data from the Massachusetts Toxics Use Reduction Act, I estimate the effect of truncation bias induced by the reporting thresholds on the validity of both time series and cross-sectional analyses. I estimate that up to 40 percent of the observed decline in reported releases in Massachusetts may be attributed to truncation at the reporting thresholds. In addition, quartile rankings of facilities based on reported releases may be in error 50 percent of the time when behavior around the reporting thresholds is not taken into account.; The final essay examines the effects of different types of environmental regulation on the diffusion of environmentally friendly production technology in the chlorine manufacturing industry. The analysis shows that direct regulations on chlorine manufacturing plants have not had demonstrable effects on adoption of cleaner technology at existing plants. However, regulation of the downstream uses of chlorine has increased the rate of closure of plants using the older, dirtier technologies. Thus, environmental regulation had an effect on technological change, but not in the way that many advocates would argue.