Do voluntary pollution reduction programs (VPRs) spur or deter environmental innovation? Evidence from 33/50 (original) (raw)
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Do Voluntary Pollution Reduction Programs (VPRs) Spur Innovation in Environmental Technology
2006
In the context of the EPA's 33/50 program, we study whether a VPR can prompt firms to develop new environmental technologies that yield future emission reduction benefits. Because pollutant reductions generally require costly reformulations of products and/or production processes, environmental over-compliance -induced by a VPR -may potentially spur environmental innovation that can reduce these costs. Conversely, a VPR may induce a participating firm to divert resources from environmental research to environmental monitoring and compliance activities that yield short-term benefits in reduced emissions. We find evidence that higher rates of 33/50 program participation are associated with significant reductions in the number of successful environmental patent applications four to six years after the program ended; these results suggest a negative relationship between the 33/50 program and longer-run environmental innovation.
Environmental Innovation and Environmental Policy: An Empirical Test of Bi-Directional Effects
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Journal of Law and Economics, 2008
This paper studies determinants and effects of firms' participation in the 33/50 program, a voluntary pollution reduction program (VPR) initiated by government regulators. We examine a wide range of explanations for voluntary corporate environmentalism and find evidence in support of an "enforcement theory" that predicts: (i) VPR participation is rewarded by relaxed regulatory scrutiny; (ii) the anticipation of this reward spurs firms to participate in the program; and (iii) the program rewards regulators with reduced pollution. We also find that 33/50 participation was more likely for firms operating in states with larger environmentalist constituencies.
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Incentives for Environmental R&D
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How Large are the Welfare Gains from Technological Innovation Induced by Environmental Policies
Journal of Regulatory Economics, 2003
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Land Economics, 2009
EPA-sponsored voluntary pollution reduction programs (VPR) have gained increased prominence in U.S. environmental policy. However, as commitments to these programs are not enforceable by design, the empirical literature has mostly focused on studying the motives for their adoption and their efficacy in curbing pollution. This paper seeks (i) to shed light on the bi-directional links between participation in a VPR and adoption of firm-structured environmental management strategies (EMS), and (ii) the joint impact of VPRs and EMS adoption on the environmental performance of participant firms. Our econometric analysis reveals that participation in the 33/50 program, helped spur the adoption of Total Quality Environment Management (TQEM), which in turn had a significant negative effect on 33/50 pollutant releases. We also find that 33/50 participation produced additional direct benefits in pollution reduction both during and after the program years, and that it enhanced the effectiveness of TQEM in reducing pollution during the post-program years.