Averting Regulatory Enforcement: Evidence from New Source Review

Nathaniel Keohane (), Erin Mansur and Andrey Voynov

No 13512, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper explores firms' response to regulatory enforcement. New Source Review, a provision of the Clean Air Act, imposes stringent emissions limitations on significantly modified older power plants. In 1999, the EPA sued owners of 46 plants for NSR violations. We study how electricity companies respond to both the perceived threat of future action, and the action itself. A discrete choice model estimates plants likelihood of being named in lawsuits increases with large historic emissions and investments. On the eve of the lawsuits, emissions at plants with a one standard deviation greater probability of being sued fell approximately ten percent.

JEL-codes: L51 L94 Q52 Q58 (search for similar items in EconPapers)
Date: 2007-10
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-env and nep-reg
Note: EEE IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published as Nathaniel O. Keohane & Erin T. Mansur & Andrey Voynov, 2009. "Averting Regulatory Enforcement: Evidence from New Source Review," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 18(1), pages 75-104, 03.

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Journal Article: Averting Regulatory Enforcement: Evidence from New Source Review (2009)
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