The effect of county non-attainment status on the product mix of plants in the pulp, paper, and paperboard industries

Elrod, Aaron A.; Malik, Arun

doi:10.1080/21606544.2019.1569561

Cited by 1 publication

(2 citation statements)

References 34 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Our paper provides a theoretical counterpart to the recent but limited empirical research on the effect of environmental regulation on product mix (Elrod & Malik, 2017, 2019). While these studies find that firms make product‐mix changes in response to regulation, the overall environmental impact of these changes is unclear (Elrod & Malik, 2017).…”

Section: Discussionmentioning

confidence: 99%

“…In the model, firms can choose to produce either one or two existing varieties of a product: a dirty (pollution-intensive) and green (non-pollution-intensive) 2 See Minniti (2006) for a review of the industrial organization and international trade literatures. 3 In an examination of the US Environmental Protection Agency's (EPA) Clean Air Act Amendments (CAAA) of 1977, Elrod and Malik (2019) find that more stringent CAAA regulation caused some US manufacturers to alter their product mixes away from pollution-intensive products and toward less pollution-intensive products. Elrod and Malik (2017) find similar results in an examination of EPA's Cluster Rule (CR)-which combines regulatory requirements from the Clean Air Act and Clean Water Act-in which manufacturers facing more stringent CR regulation (treatment group) were more likely to drop pollution-intensive bleached products relative to less pollution-intensive unbleached products compared to manufacturers facing less stringent CR regulation (control group).…”

mentioning

confidence: 99%

See 1 more Smart Citation

The perverse effect of environmental regulation on emissions: The role of product‐mix changes

St-Pierre

Elrod

2021

J Public Economic Theory

Self Cite

View full text Add to dashboard Cite

We study the effect of environmental regulation (taxation) on emissions when the only available abatement method consists of product-mix changes. Firms choose to produce one or both varieties of a product-a pollutionintensive (dirty) and a non-pollution-intensive (green)and compete in a differentiated Cournot duopoly. We characterize the equilibrium market structure as a function of the tax rate and show that increases in the tax can promote product-mix changes that lead to a jump in emissions for some tax range, an effect we call the perverse effect of taxation. Our work emphasizes the key role horizontal product differentiation in this process and shows that the perverse effect does not require the presence of vertical product differentiation. Further, the perverse effect of taxation is especially strong in the presence of incomplete regulation, that is, when only one of the markets is subject to taxation. | INTRODUCTIONCan environmental regulation increase pollution? Command-and-control and market-based environmental policies provide incentives for polluting sources to reduce their pollution. 1 1 These incentives are borne out in both theoretical and empirical studies. For example, studies find that carbon taxes reduce CO 2 emissions (see Lin & Li, 2011 for a thorough review of the literature), that monitoring and enforcement of the Clean Water Act reduce effluent violations and discharges (see, e.g., Laplante & Rilstone, 1996;Magat & Viscusi, 1990;Shimshack & Ward, 2005), and more recently, that increases in the stringency of environmental regulation account for the majority of emissions reductions in the US manufacturing sector between 1990 and 2008 (Shapiro & Walker, 2018).

show abstract

Section: Discussionmentioning

confidence: 99%

mentioning

confidence: 99%