The Review of Economics and Statistics Vol. 103 No. 3 2021
Environmental Regulations and the Cleanup of Manufacturing: Plant-Level Evidence
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.
- DOI
- 10.1162/rest_a_00904
- Volume
- 103
- Issue
- 3
- Pages
- 476-491
- Language
- en
- Sources
- openalex crossref