Evaluating the role of EPA policy levers: An examination of a voluntary program and regulatory threat in the metal-finishing industry

Abstract

a b s t r a c tIn this paper, we evaluate the influence of two environmental policy levers on emissions in the metal-finishing industry: a voluntary program-the Strategic Goals Program (SGP)-and the threat of formal regulation. While voluntary approaches are increasingly utilized as policy tools, the effectiveness of such programs is often questioned, and the impact of a voluntary program in tandem with a regulatory threat is not well understood. We examine the decision to participate in the SGP and, conditional on that decision, determine the effects that the SGP and regulatory threat had on facility emissions behavior. Participation in the program appears related to several forms of external pressure: the regulatory threat, industry trade association membership, the level of environmental giving in a state, and a number of neighborhood characteristics. However, over the entire study period, participation in the SGP yielded little, if any, additional reductions in emissions, while the regulatory threat is correlated with significant emission reductions by both participants and non-participants. Splitting our study period into two time periods reveals a more nuanced relationship between SGP participation and emissions behavior than is evident over the entire study period. While participants do not appear to take advantage of the program initially, they make greater strides in reducing emissions than non-participants in later years. The split sample results also indicate that both participants and non-participants react strongly to the initial threat of regulation and to an increase in its relative stringency.

Voluntary corporate environmental initiatives and shareholder wealth

“…Although a clear explanation for these contrasting results is not obvious, in general it seems that studies where the environmental performance measure is tied to liability, compliance, and regulatory risks find a positive relationship between environmental performance and financial performance. This is consistent with the findings of Khanna and Damon (1999), Anton et al (2004), Darnall et al (2008) and Brouhle et al (2009) which show that liability and regulatory threats are a major motivation for firms joining voluntary programs like EPA's 33/50 Program to reduce toxic emissions and adopting environmental management systems (EMS). Additionally, Malloy, Erekson and Gorman (2002), in their study of investor perceptions, find that environmental investments are interpreted by investors to raise costs (rather than lower them), except in the case where the firm would face non-compliance penalties if these investments were not made.…”

On The Generation of Interferometric Colors in High Purity and Technical Grade Aluminum: An Alternative Green Process for Metal Finishing Industry

“…solvents and surfactants, acids and bases, solutions of metal salts such as nickel, chromium, cadmium, etc.). [3,4] To address health and environmental pollution issues associated with metal finishing industries, institutions such as the US Environmental Protection Agency (EPA) have implemented a series of actions and new approaches strategically aimed to minimize the impact of this industry in our health and environment. [5,6] These actions include general waste reduction practices, alternative and substitute processes, process solution maintenance, chemical recovery technologies and off-site recovery of metals.…”

The role of environmental regulation in the future competitiveness of the pulp and paper industry: the case of the sulfur emissions directive in Northern Europe

“…According to Campbell (2007, p. 962), "corporations are more likely to act in socially responsible way the more they encounter strong state regulation, collective industry self-regulation, NGOs and other independent organizations that monitor them." Brouhle et al (2009) argue that the threat of direct regulation can be an important driver for improving a firm's environmental performance, and it may also encourage diffusion of voluntary activities for improving environmental performance. Thus, and also in line with Lyon and Maxwell (2008), CSR and strong government regulation may be rather complements than substitutes for each other.…”