Journal of Environmental Economics and Management

"A series of cross-sectional multiple regressions of 1969 and 1970 U.S. mortality rates is presented for up to 112 SMSAs, against various demographic, environmental, and lifestyle variables. The basic data set is the same as that used by L. B. Lave and E. P. Seskin...for 1969, except that many more independent explanatory variables have been added. Since not all of these variables were available for all of the SMSAs, there were several data sets analyzed, depending on the selection of independent variables. The regression coefficients for air pollution tended to be quite sensitive to both the inclusion of the new independent variables and the selection of data sets."

In an attempt to achieve the positive externalities from a more knowledge-intensive economy, many developing countries have emphasized improvements in their science and technology (S&T) capabilities. China, in particular, has been experiencing an acceleration in its R&D intensity, causing many to wonder whether China is undergoing an S&T takeoff. In this paper, we simulate the effects of an S&T takeoff using a model of China that incorporates econometric estimates from 1500 industrial enterprises in China. We find that an S&T takeoff will lead to lower goods prices overall, but a larger drop in energy prices due to the energy-saving bias of R&D. The outcome is higher capital investment and economic growth; a substitution of energy for other factors of production; and greater energy consumption by households. Our findings underscore the importance of considering the economy-wide implications of a technology policy, recognizing that better technology does not necessarily imply a cleaner environment.

This paper uses firm-level data about electric utilities to develop an empirical model of how electric utilities use and bank SO2 pollution permits under the Acid Rain Program. The empirical model considers emissions, fuels, and labor as variable inputs with quasi-fixed stocks of permits and capital. Consequently, substitution possibilities between the environment and other production factors can be measured and tested. The results reveal substantial substitution between emissions, permit stocks, capital, fuel, and labor. The empirical findings also indicate that firms bank permits primarily as a hedge against uncertainty and for other firm-specific reasons. Overall, the results suggest that cap-and-trade approaches can reduce the cost of meeting environmental goals by providing a mechanism for addressing regulatory and market risks and by signaling an appropriate price for factor use, especially irreversible capital investments.

A model of environmental regulation under uncertainty is developed to compare the effect of price versus quantity rules upon technical change. Quantity rules tend to encourage more efficient levels of technical change.

In this paper we consider whether joint bidding for oil leases in U.S. Department of the Interior Outer Continental Shelf (OCS) auctions has been compatible with the maintenance of competition in these auctions. In 1975 eight major oil companies were banned from being co-bidders on any joint bids, apparently due to concern that joint bidding was fostering collusion. Focusing on eight major companies, five of which were banned from joint bidding in 1975, we present evidence which strongly suggests that joint bidding was consistent with more competitive rather than less competitive behavior.

Motivated by the nature of U.S. laws, a model is developed for a firm that maximizes expected profit and faces imperfectly enforceable pollution standards with imperfectly enforceable reporting requirements. Some previous models of imperfectly enforceable standards and taxes are special cases of this general mode. When the fine for violating the pollution standard is linear in excess pollution, the form will equate the marginal cost of control to the marginal fine rate, and thus actual pollution will be insensitive to enforcement parameters related to under-reporting. The more complex comparative statics that exist when the fine is non-linear are analyzed, and comparisons with other models are made.

This paper tests whether adopting the international norm ISO 14001 significantly impacts environmental performance in Quebec's pulp and paper industry. Using monthly data collected from 37 plants between 1997 and 2003, we show that: (i) ISO certification does not lead to a reduction in total suspended solid emissions or in quantity of rejected process water; (ii) discharge of biological oxygen demand decreases by about 9% following certification; (iii) contrary to the group of plants that did not adopt the ISO norm, the adopting plants did not experience a significant negative trend in emissions over our sample period. Moreover, our results show that the impact of ISO is very variable across adopting plants. If some plants considerably reduce emissions following certification, we find that most adopters either maintain or even increase emissions after being ISO accredited.

We consider the effect of rent seeking costs on the design of an efficient pollution tax. Earlier work has concluded that a pollution tax levied on an otherwise unregulated monopoly should always be less than the Pigouvian rate. This study demonstrates that if rent seeking costs are present, the appropriate discharge tax for a monopoly firm can equal or exceed the marginal damage from its pollution. Calculations reveal that under a wide range of conditions the ideal corrective tax for a monopoly firm is very close to the fully internalizing Pigouvian tax.

This note argues that Stanley Jevons in his “Theory of Political Economy” defined a concept closely related to what came to be known in the literature as “option value” introduced in a seminal paper by Weisbrod (Quart. J. Econom.78, 471–477 (1964)). Although this is a matter of interpretation, their contributions are probably closer to “option price” in modern economic terminology.

This study employs a parametric input distance function that incorporates both desirable and undesirable outputs to provide a more complete representation of the production technology from which environmentally sensitive productivity and efficiency measures can be generated. This framework also generates pollution abatement cost estimates that are useful for policy making. An input-based Malmquist index of productivity growth that appropriately credits the producer not only for increases in marketable or desirable outputs but also for the production of improved environmental quality through pollution abatement activities is derived from the input distance function. The method was applied to time series data from the Canadian pulp and paper industry. Our shadow price estimates indicate that the marginal cost to producers of pollution control has been rising. The main conclusion of this study is that productivity improvement, from the social viewpoint, has been stronger than conventional measures would suggest.

This paper reviews the impact of the literature in depletable resources and energy economics over the period 1973–1998, particularly the initial period of publication of the Journal of Environmental Economics and Management, 1974–1998. A discussion of prominent policy issues in this arena is provided, along with an indication of what academic economics papers have contributed to that debate. This is followed by a citation analysis of contributions in the fields of energy and exhaustible resource economics. For each of these two fields, a list of the top papers in each five-year period from 1974 to 1998 is presented, along with a list of the top journals in each decade, based on average citations per article. The top ten cited articles in the fields in the Journal of Environmental Economics and Management are also presented.

This paper considers whether the Journal of Environmental Economics and Management (JEEM) has had impact on the development and applications of the methods used to estimate economic values for non-marketed environmental resources. Journal editors control the research dialogue in a discipline and as a result have the potential to influence its scope and direction. At least four areas of research have been influenced by JEEM, the theory and practice of contingent valuation, the use of preference restrictions in valuation, the development and application of corner solution models, and the role of substitution between environmental resources for valuation.

This paper presents a model of the collective emission permit banking behavior of electricity-generating units affected by Title IV of the Clean Air Act Amendments of 1990. A rigorous treatment of the constraint that pollution permits cannot be borrowed from future allocations is introduced. This approach enables an analysis of the impact of future changes in electricity demand, regulations, and technologies on the present permit price and emissions level. The effect of uncertainty on the banking behavior is also explored.

This paper provides a characterization of meaningful environmental indices. Based on the interpretation of environmental indices as representations of a preference ordering on multi-dimensional environmental states, a meaningful index is defined as an index whose underlying preference ordering is independent of admissible transformations of the variables which describe environmental states. Admissible types of transformation are classified into categories of measurability and comparability, and these categories determine which indices are meaningful. One major finding is that indices in the form of an arithmetic mean are mostly not meaningful because the variables do not satisfy the required property of interval-scale unit comparability. For environmental variables in the non-negative domain whose observations are strictly positive and whose admissible transformations are mere expansions meaningful indices take the form of a geometric mean.

The U.S. EPA has initiated the 33/50 program to encourage firms to voluntarily reduce releases and transfers of 17 toxic chemicals. This paper evaluates the factors leading to participation in this program to assess its potential to augment more traditional command and control regulation. The results show that large firms with substantial toxic releases in unconcentrated industries are the most likely participants. The results also indicate that public information and awareness plays an important role and that EPA and other regulators can improve environmental performance by encouraging competition in environmental quality.

We examine incentives for firm participation in the EPA's 33/50 Program and the impact of this Program on firm emissions. We use a sample of manufacturing firms from 19 industry groups that were invited to participate in the Program in 1991. We find that while the Program may have attracted some of the most polluting firms, the decline in emissions observed between 1991 and 1995 was the result of an independent trend rather than a direct consequence of the Program as argued by an earlier study published in this Journal.

This paper examines the motivations for participation in the voluntary 33/50 Program and the program's impact on the toxic releases and economic performance of firms in the U.S. chemical industry. It demonstrates that the benefits due to public recognition and the potentially avoided costs of liabilities and compliance under mandatory environmental regulations provide strong incentives for participation. After controlling for sample selection bias and the impact of other firm-specific characteristics, this paper shows that program participation led to a statistically significant decline in toxic releases over the period 1991–93. The program also had a statistically significant negative impact on the current return on investment of firms, but its impact on the expected long run profitability of firms was positive and statistically significant.