Transboundary Spillovers and Decentralization of Environmental Policies

Most US federal environmental policies allow states to assume responsibility for implementation and enforcement of regulations; states with this responsibility are referred to as "authorized'' or having "primacy.'' Although such decentralization may have benefits, it may also have costs with pollution spillovers across states. This paper estimates these costs empirically by studying the free riding of states authorized under the Clean Water Act. The analysis examines water quality in rivers around the US and includes fixed effects for the location where water quality is monitored to address unobserved geographic heterogeneity. The estimated equations suggest that free riding gives rise to a 4% degradation of water quality downstream of authorized states, with an environmental cost downstream of $17 million annually.

International Spillovers and Water Quality in Rivers: Do Countries Free Ride?

Transboundary spillovers may degrade environmental quality if countries free ride. This paper examines the extent of such degradation in water quality in international rivers. Using data from river monitoring stations in the UN's Global Emissions Monitoring System (GEMS), it compares pollution levels in international and domestic rivers. The results suggest that free riding may substantially increase pollution in international rivers, but the estimates are sensitive to the inclusion of country effects.

The Pace of Progress at Superfund Sites: Policy Goals and Interest Group Influence

Bureaucracies may set priorities for their workload according to social goals or the desires of concentrated private interests. This paper explores bureaucratic priorities empirically by studying Superfund, the federal program for cleaning up contaminated sites. It examines the amount of time that sites on Superfund's National Priorities List require to complete three states from listing to cleanup, using an econometric method for multiple sequential durations. The empirical results provide little evidence that the EPA prioritizes sites according to their harms. By contrast, concentrated private interests, such as liable parties and local communities, play an important role in the EPA's priorities. Delays caused by liable parties may reduce net benefits of cleanup by 8%. This result suggests a benefit from funding provision of environmental quality and other public goods through diffuse sources, such as broad-based taxes, to avoid the detrimental effects of such concentrated interests.

Decentralization and Environmental Quality: An International Analysis of Water Pollution

This paper explores the empirical effects of decentralization on environmental quality by studying water pollution in rivers around the world. It examines the level of pollution and variation in pollution across jurisdictions within a country, for both a local and a regional pollutant. Federal countries exhibit greater interjurisdictional variation in pollution, supporting the traditional view that decentralization allows policies more tailored to local conditions. However, the analysis does not point to a “race to the bottom” in pollution levels.

The effects of hazardous waste taxes on generation and disposal of chlorinated solvent waste

In 1989, 30 states levied taxes on e generation or management of hazardous waste. These taxes constitute one of the broadest applications of an emissions tax in U.S. environmental policy and provide a natural experiment for studying the effects of such taxes. This paper examines the impacts on chlorinated solvent waste from metal cleaning, using plant-level data from EPA's 1987-89 Toxic Release Inventories. The results suggest that the taxes have an observable, but small, impact on total generation of solvent wastes. The taxes also reduce the frequency with which land disposal is used relative to incineration or other treatment.Supported by the MIT Center for Energy and Environmental Policy Research

Monitoring and Enforcement of Climate Policy

This chapter applies recent research on environmental enforcement to a potential U.S. program to control greenhouse gases, especially through emission trading. Climate policies present the novel problem of integrating emissions reductions that are relatively easy to monitor (such as carbon dioxide emissions from fossil fuels) with those that may be very difficult to monitor (such as some emissions of other greenhouse gases). The paper documents the heterogeneity in monitoring costs across different parts of current carbon markets. It argues that a broad emission trading system that includes more difficult-to-enforce components can provide less incentive to violate the law than a narrower program; thus, the government may not find it more costly to assure compliance with a broader program.

Environmental Liability and Redevelopment of Old Industrial Land

Many communities are concerned about the reuse of potentially contaminated land ("brownfields") and believe that environmental liability is a hindrance to redevelopment. However, with land price adjustments, liability might not impede the reuse of this land. Existing literature has found price reductions in response to liability, but few studies have looked for an effect on vacancies. This paper studies variations in state liability rules -- specifically, strict liability and joint and several liability -- that affect the level and distribution of expected private cleanup costs. It explores the effects of this variation on industrial land prices and vacancy rates and on reported brownfields in a panel of cities across the United States. In the estimated equations, joint and several liability reduces land prices and increases vacancy rates in central cities. Neither a price nor quantity effect is estimated from strict liability. The results suggest that liability is at least partly capitalized, but does still deter redevelopment.

The Cost of Reducing Municipal Solid Waste

This paper explores public policies for reduction of municipal solid waste. We parameterize a simple model of waste disposal using supply and demand elasticities from the economics literature and 1990 prices and quantities of recyclable and recycled materials. Using this model, we calculate the waste reduction in response to three public policies: (i) deposit/ refunds, (ii) advance disposal fees, and (iii) recycling subsidies. The results illustrate the effects of the three policies on source reduction and recycling of five recyclable materials that comprise 56 percent of municipal solid waste: aluminum, glass, paper, plastic, and steel. The calculated responses provide information about the cost of reducing municipal solid waste through various policies. This analysis suggests that a 7.5 percent reduction in disposal of the solid wastes in the model might have been optimal in 1990 from a benefit-cost perspective.