The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing
The economic costs of environmental regulations have been widely debated since the U.S. began to restrict pollution emissions more than four decades ago. Using detailed production data from nearly 1.2 million plant observations drawn from the 1972-1993 Annual Survey of Manufactures, we estimate the...
| Main Authors: | , , |
|---|---|
| Format: | Working Paper |
| Published: |
Cambridge, MA: Department of Economics, Massachusetts Institute of Technology
2012
|
| Subjects: | |
| Online Access: | http://hdl.handle.net/1721.1/72654 |
| _version_ | 1811083253473345536 |
|---|---|
| author | Greenstone, Michael List, John A. Syverson, Chad |
| author_facet | Greenstone, Michael List, John A. Syverson, Chad |
| author_sort | Greenstone, Michael |
| collection | MIT |
| description | The economic costs of environmental regulations have been widely debated since the U.S. began to restrict pollution emissions more than four decades ago. Using detailed production data from nearly 1.2 million plant observations drawn from the 1972-1993 Annual Survey of Manufactures, we estimate the effects of air quality regulations on manufacturing plants’ total factor productivity (TFP) levels. We find that among surviving polluting plants, stricter air quality regulations are associated with a roughly 2.6 percent decline in TFP. The regulations governing ozone have particularly large negative effects on productivity, though effects are also evident among particulates and sulfur dioxide emitters. Carbon monoxide regulations, on the other hand, appear to increase measured TFP, especially among refineries. The application of corrections for the confounding of price increases and output declines and sample selection on survival produce a 4.8 percent estimated decline in TFP for polluting plants in regulated areas. This corresponds to an annual economic cost from the regulation of manufacturing plants of roughly $21 billion, which is about 8.8 percent of manufacturing sector profits in this period. |
| first_indexed | 2024-09-23T12:29:42Z |
| format | Working Paper |
| id | mit-1721.1/72654 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T12:29:42Z |
| publishDate | 2012 |
| publisher | Cambridge, MA: Department of Economics, Massachusetts Institute of Technology |
| record_format | dspace |
| spelling | mit-1721.1/726542019-04-11T07:48:07Z The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing Greenstone, Michael List, John A. Syverson, Chad clean air act costs of regulation air pollution The economic costs of environmental regulations have been widely debated since the U.S. began to restrict pollution emissions more than four decades ago. Using detailed production data from nearly 1.2 million plant observations drawn from the 1972-1993 Annual Survey of Manufactures, we estimate the effects of air quality regulations on manufacturing plants’ total factor productivity (TFP) levels. We find that among surviving polluting plants, stricter air quality regulations are associated with a roughly 2.6 percent decline in TFP. The regulations governing ozone have particularly large negative effects on productivity, though effects are also evident among particulates and sulfur dioxide emitters. Carbon monoxide regulations, on the other hand, appear to increase measured TFP, especially among refineries. The application of corrections for the confounding of price increases and output declines and sample selection on survival produce a 4.8 percent estimated decline in TFP for polluting plants in regulated areas. This corresponds to an annual economic cost from the regulation of manufacturing plants of roughly $21 billion, which is about 8.8 percent of manufacturing sector profits in this period. 2012-09-11T21:18:26Z 2012-09-11T21:18:26Z 2012-09-10 Working Paper http://hdl.handle.net/1721.1/72654 Working paper, Massachusetts Institute of Technology, Dept. of Economics;12-24 An error occurred on the license name. An error occurred getting the license - uri. application/pdf Cambridge, MA: Department of Economics, Massachusetts Institute of Technology |
| spellingShingle | clean air act costs of regulation air pollution Greenstone, Michael List, John A. Syverson, Chad The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing |
| title | The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing |
| title_full | The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing |
| title_fullStr | The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing |
| title_full_unstemmed | The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing |
| title_short | The Effects of Environmental Regulation on the Competitiveness of U.S. Manufacturing |
| title_sort | effects of environmental regulation on the competitiveness of u s manufacturing |
| topic | clean air act costs of regulation air pollution |
| url | http://hdl.handle.net/1721.1/72654 |
| work_keys_str_mv | AT greenstonemichael theeffectsofenvironmentalregulationonthecompetitivenessofusmanufacturing AT listjohna theeffectsofenvironmentalregulationonthecompetitivenessofusmanufacturing AT syversonchad theeffectsofenvironmentalregulationonthecompetitivenessofusmanufacturing AT greenstonemichael effectsofenvironmentalregulationonthecompetitivenessofusmanufacturing AT listjohna effectsofenvironmentalregulationonthecompetitivenessofusmanufacturing AT syversonchad effectsofenvironmentalregulationonthecompetitivenessofusmanufacturing |