Why Is Pollution from US Manufacturing Declining? The Roles of Environmental Regulation, Productivity, and Trade

By Joseph S. Shapiro, Reed Walker. The American Economic Review, 2018

741 citations recorded by the source corpus.

Between 1990 and 2008, air pollution emissions from US 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. (JEL F18, H23, L60, Q52, Q53, Q56, Q58)

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/5fcf95786a8acb258a1e99fa817521abb207f836

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Citations in the corpus

Defensive Investments and the Demand for Air Quality: Evidence from the NOx Budget Program (2017, positive): “We build upon the canonical Becker-Grossman health production function to highlight the role of defensive investments in the measurement of WTP for clean air (Becker 1965; Grossman 1972; Freeman 2003). This model shows that accurate measurement of WTP requires knowledge of both how pollution affects”
Going Green in China: Firms’ Responses to Stricter Environmental Regulations (2019, neutral): “Our paper is also related to studies executing decomposition of change of emissions reductions that can be explained by various effects (Levinson, 2009; Martin, 2011; Shapiro and Walker, 2018).”
Environmental policy stringency, renewable energy consumption and CO2 emissions: Panel cointegration analysis for BRIICTS countries (2020, background): “Shapiro and Walker (2018) also found that the changes in environmental policies account for most of the reduction of air pollutions emissions that the US experienced in the period 1990–2008.”