Estimating regulation-induced substitution: the effect of the clean air act on water and ground pollution

摘要

Recent research has demonstrated that the regulations imposed by the Clean Air Act Amendments' (CAAA's) are associated with reductions in manufacturing activity and improvements in ambient air quality (J. Vernon Henderson, 1996; Randy Becker and Henderson, 2000, 2001; Greenstone, 2002, 2003; Kenneth Chay and Greenstone, 2003a, b). Some portion of these reductions in emissions is due to lower output and changes in inputs. It is widely believed, however, that much of the reduction is due to air-pollution-abatement devices such as scrubbers and electrostatic precipitators. These abatement devices remove the pollutants from the air, but they are generally not eliminated, and the residuals are released into water bodies, landfills, or injected into the ground. The possibility that the CAAA's have the unintended consequence of increasing releases into other media has not been examined in the economics literature previously. If this cross-media substitution is important, then a complete accounting of the costs and benefits of this legislation requires measures of its extent and the damages associated with releases into each of these media.