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Costs of Air Quality Regulation

Costs of Air Quality Regulation

(p.159) 5 Costs of Air Quality Regulation
Behavioral and Distributional Effects of Environmental Policy
Randy A. BeckerJ. Vernon Henderson
University of Chicago Press

An ongoing debate in the United States concerns the costs imposed by environmental regulations on industry. This chapter explores some of the costs associated with air quality regulation, focusing on regulation pertaining to ground-level ozone and its effects on two industries sensitive to such regulation: industrial organic chemicals and miscellaneous plastic products. Both of these industries are major emitters of volatile organic compounds and nitrogen oxides, the chemical precursors to ozone. Using plant-level data from the U.S. Census Bureau's Longitudinal Research Database (LRD), the chapter analyzes the effects this type of regulation has had on the timing and magnitudes of investments by firms in these industries and on their operating costs. As an alternative way to assess costs, it also employs plant-level data from the U.S. Census Bureau's Pollution Abatement Costs and Expenditures survey.

Keywords:   environmental regulations, air quality, ozone, organic chemicals, plastic products, operating costs, volatile organic compounds, nitrogen oxides, plant-level data, Census Bureau

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