The Effect of Environmental Regulation on Plant-Level Product Mix: A Study of EPA's Cluster Rule

Elrod, Aaron A.; Malik, Arun

doi:10.2139/ssrn.2342179

Cited by 5 publications

(10 citation statements)

References 5 publications

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“…Environmental regulation is an external situational factor that constrains household CWR behaviour. The essence of environmental regulation is an institutional arrangement to internalise environmental costs by affecting market resource allocation, ultimately achieving the goal of promoting social welfare (Elrod and Malik, 2013). However, scholars merely have explored the impact of environmental regulation on household dead pig recycling (DPR) behaviour.…”

Section: Introductionmentioning

confidence: 99%

Assessing impact of risk perception and environmental regulation on household carcass waste recycling behaviour in China

Wang

et al. 2019

Waste Manag Res

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Carcass waste recycling exerts an important influence on preventing epidemic diseases, improving the ecological environment, and promoting sustainable development of the livestock industry although it has rarely aroused widespread attention throughout the world. Based on the data of 470 households engaged in breeding pigs in Hebei, Henan, and Hubei, China, and considering dead pigs as an example, this study employed the Double Hurdle model to assess impact of risk perception on household dead pig recycling behaviour and further tested the moderating effects of environmental regulation on the impact of risk perception on household dead pig recycling behaviour. The results show that: (1) Risk perception has a positive and significant influence on household dead pig recycling behaviour; however, this influence is mainly caused by households’ production and public health safety risk perceptions. Food and ecological safety risk perceptions have no significant influence on household dead pig recycling behaviour. (2) Environmental regulation has enhanced moderating effects on the impact of risk perception on household dead pig recycling behaviour, but the moderating effects mainly arose from imperative, guiding, and voluntary regulations. A moderating effect of incentive regulation is not obvious. (3) The moderating effects of environmental regulations present strong heterogeneity when different breeding scales and recycling technical attributes are considered. Finally, some policy implications, such as improving households’ risk perception level, enhancing environmental regulation intensity, and classifying to formulate measures, are proposed.

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Section: Introductionmentioning

confidence: 99%

Assessing impact of risk perception and environmental regulation on household carcass waste recycling behaviour in China

Wang

et al. 2019

Waste Manag Res

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“…Several survey papers have also attempted to draw broader generalizations from the limited literature on RAs of environmental, health, and safety regulation, such as Harrington, Morgenstern andNelson (2000),Harrington (2006),OMB (2006),Simpson (2014) andLutter (2012). 5 Another issue, explored byElrod and Malik (2017), is the possibility of changes in the product mix of both regulated and unregulated firms in response to the new rule. Such changes could, in principle, confound attempts to estimate costs and benefits on both ex ante and ex post bases.terms of use, available at https://www.cambridge.org/core/terms.…”

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confidence: 99%

“…5Another issue, explored by Elrod and Malik (2017), is the possibility of changes in the product mix of both regulated and unregulated firms in response to the new rule. Such changes could, in principle, confound attempts to estimate costs and benefits on both ex ante and ex post bases.…”

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confidence: 99%

Retrospective Analysis of U.S. Federal Environmental Regulation

Morgenstern¹

2017

J. Benefit Cost Anal.

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Retrospective, or ex post, analysis of U.S. federal regulation aims to rigorously document regulatory outcomes using cost, benefit, and distributional metrics. This paper presents nine new case studies involving a total of 34 comparisons of ex ante and ex post estimates from a diverse group of environmentally oriented rules. Despite the potential for selection bias and other limitations of the case study approach, the results suggest a slight tendency to overestimate both costs and benefits (or effectiveness) of regulation. This paper considers various analytic issues relevant to developing credible baselines for comparison, and offers policy lessons regarding the design of emissions trading programs along with approaches for incorporating uncertainty into both preregulatory studies and policy designs. Recommendations to facilitate and support future retrospective analyses are also presented.

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“…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). However, the authors also find evidence that the control group was more likely to add bleached products after, relative to before, the CR, thereby altering their product mixes toward pollution-intensive products.…”

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confidence: 70%

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

St-Pierre

Elrod

2021

J Public Economic Theory

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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).

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The Effect of Environmental Regulation on Plant-Level Product Mix: A Study of EPA's Cluster Rule

Cited by 5 publications

References 5 publications

Assessing impact of risk perception and environmental regulation on household carcass waste recycling behaviour in China

Assessing impact of risk perception and environmental regulation on household carcass waste recycling behaviour in China

Retrospective Analysis of U.S. Federal Environmental Regulation

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

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