American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Why Is Pollution from US Manufacturing Declining? The Roles of Environmental Regulation, Productivity, and Trade
American Economic Review
vol. 108,
no. 12, December 2018
(pp. 3814–54)
(Complimentary)
Abstract
Between 1990 and 2008, air pollution emissions from U.S. manufacturing fell by 60 percent despite a substantial increase in manufacturing output. We show that these emissions reductions are primarily driven by within-product changes in emissions intensity rather than changes in output or in the composition of products produced. We then develop and estimate a quantitative model linking trade with the environment to better understand the economic forces driving these changes. Our estimates suggest that the implicit pollution tax that manufacturers face doubled between 1990 and 2008. These changes in environmental regulation, rather than changes in productivity and trade, account for most of the emissions reductions.Citation
Shapiro, Joseph S., and Reed Walker. 2018. "Why Is Pollution from US Manufacturing Declining? The Roles of Environmental Regulation, Productivity, and Trade." American Economic Review 108 (12): 3814–54. DOI: 10.1257/aer.20151272Additional Materials
JEL Classification
- F18 Trade and Environment
- H23 Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- L60 Industry Studies: Manufacturing: General
- Q52 Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
- Q53 Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q56 Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
- Q58 Environmental Economics: Government Policy