Title

The Unintended Disincentive In The Clean Air Act

Keywords

Clean Air Act; Environmental regulations; New Source Review; Propensity score matching

Abstract

The Clean Air Act and its subsequent amendments have been lauded as the primary stimulant to the impressive improvement in local air quality in the US since 1970. A key component of these regulations is the New Source Review (NSR) requirement, which includes the contentious stipulation that when an existing plant seeks to modify its operations, the entire plant must comply with current standards for new sources. This requirement was included to improve air quality in dirty areas, and prevent a deterioration of air quality in clean areas. Yet, whether NSR provides the proper plant-level incentives is unclear: there are strong disincentives to undertake major plant modifications to avoid NSR. In our examination of more than 2500 and 2200 plant-level modification decisions and closures, respectively, we find empirical evidence suggesting that NSR retards modification rates, while doing little to hasten the closure of existing dirty plants.

Publication Date

1-1-2004

Publication Title

Advances in Economic Analysis and Policy

Volume

4

Issue

2

Number of Pages

29-56

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.2202/1538-0637.1204

Socpus ID

4344614183 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/4344614183

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