The Impact of Quasi-Regulatory Mechanisms on Polluting Behavior: Evidence from Pollution Prevention Programs and Toxic Releases

Abstract

To date, there is little convincing evidence on the effectiveness of “quasi-regulatory” mechanisms. Here I investigate how quasi-regulatory policies known as pollution prevention (“P2”) programs affect toxic pollution. I construct a data base on state-level P2 programs as well as the 1990 federal Pollution Prevention Act (PPA) and exploit variation in state adoption dates and program characteristics to study their effects on facility-level toxic releases. I find strong evidence that these mechanisms can affect pollution outcomes. In particular, I find that (1) the 1990 PPA has had a significant effect on toxic releases; (2) state programs geared to reducing the costs of P2 activities led to significant reductions in toxic releases; and (3) the response to P2 programs that increased the regulators’ ability to monitor polluting behavior could either increase or decrease reported releases, depending on the regulators’ ability to verify the accuracy of the reported releases.TRI, Quasi-Regulation, Voluntary Programs, Toxic Pollution