Incentives for Pollution Abatement: Regulation, Regulatory Threats, and Non-Governmental Pressures

In the last decade, voluntary efforts by firms to reduce their environmental impacts have received increasing attention from both policymakers and scholars. In this article, we consider polluters’ incentives to reduce their releases. In particular, using data from Canada’s National Pollutant Release Inventory, we examine the impacts of conventional regulation, threats of regulation, and non-governmental pressures facilitated by public dissemination of information about pollutant releases. We find that the vast majority of reductions reported to the inventory to date were not voluntary, as has often been assumed, but are, rather, the result of direct regulation of a relatively small number of polluters. We find strong effects of federal regulation among other sources as well, with much weaker responses to the mere threat of regulation. However, we raise concerns about growth of less visible waste streams, such as land disposal and underground injection, as well as transfers of wastes to other communities. Finally, we report evidence that some waste streams are increasing in toxicity, an effect that may outweigh the benefits of reductions in releases. ∗UBC, Department of Political Science, 1866 Main Mall, Vancouver, BC, V6T 1Z1, Canada. Phone: +1-604822-4922. Fax: +1-604-822-5540. E-mail: [email protected]. Kathryn Harrison gratefully acknowledges the support of the Social Scienes and Humanities Research Council of Canada, the Canada-US Fulbright program, and Resources for the Future. The authors would like to thank Jen Baggs for sharing results of her work, and Andrea Podhorsky and Jessica Richardson for research assistance. †UBC, Faculty of Commerce, 2053 Main Mall, Vancouver, BC, V6T 1Z2, Canada. Phone: +1-604-822-8484. Fax: +1-604-822-8477. E-mail: [email protected].