The Review of Economics and Statistics · 2020 · 77 citations · 19 references
Public AffairsEnvironmental PolicyRegulatory PolicyAir PollutionAir Quality PolicyEnvironmental RegulationAir PollutantsAir QualityEnvironmental StandardsIndustrial Emission ControlIndustrial EmissionsIndustrial PollutionAir Pollution StandardsEmission Intensity ReductionIndustrial Emission RegulationIndustrial Emission StandardsIndustrial Emissions PolicyIndustrial Environmental StandardsManufacturing Emissions Reduction
Abstract For much of the industrialized world, pollution from manufacturing has been falling despite increased output. We examine how air quality standards---a common environmental regulation---have contributed to this cleanup of manufacturing. We develop a general equilibrium model to show how air quality standards can lead to a cleanup by causing reductions in plant emission intensity, relative changes in plant output, and plant entry and exit. We provide quasi-experimental evidence from Canada to highlight the magnitude of these responses. Our results suggest that air quality standards explain just under 40% of the cleanup of manufacturing.
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