Statutory Rewards to Environmental Self-Auditing: Do They Reduce Pollution and Save Regulatory Costs? Evidence from a Cross-State Panel

Santiago Guerrero and Robert Innes

No 6204, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: State-level statutes provide firms that engage in environmental self-audits, and that self-report their environmental violations, with a variety of different regulatory rewards, including "immunity" from penalties and "privilege" for information contained in self-audits. This paper studies a panel of State-level industries from 1989-2003, in order to determine the effects of the different statutes on toxic pollution and government inspections. We find that, by encouraging self-auditing, privilege and limited immunity protections tend to reduce pollution and government enforcement activity; however, more sweeping immunity protections, by reducing firms' pollution prevention incentives, raise toxic pollution and government inspection oversight.

Keywords: Environmental Economics and Policy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env and nep-reg
Date: 2008
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Persistent link: http://EconPapers.repec.org/RePEc:ags:aaea08:6204

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