Do environmental regulations reduce greenhouse gas emissions? A study on Canadian industries

Golnaz Sedigh ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper uses the Canadian industrial macro-level data from CANSIM to investigate the effect of formal and informal regulations on pollution intensity. Proxies for formal and informal regulation variables are defined as in Cole et al., 2005. The econometrics model is a panel with 23 manufacturing industries over 10 years, from 1994 to 2003. Manufacturing industries are chosen because they are the most pollutant industries. It is found that formal and informal regulations have significant effects on decreasing the direct and indirect greenhouse gas emissions in Canadian industries. Provinces with younger populations have stricter informal regulation on pollution density, because younger populations care more about the future quality of the environment. Also, provinces with a higher rate of unemployment have less formal regulation on pollution density; for those provinces, providing employment for citizens is more important than providing a healthy environment. Wealthier provinces with a low employment rate face less pressure from society and can spend more money on the environment; therefore, they have lower pollution density. Furthermore, industries with large average firm size can decrease emissions more than other industries. The cost of controlling the emissions decreases with firm size because of economies of scale.

Keywords: Keywords: Canadian manufacturing industries; Air pollution; Environmental regulations (search for similar items in EconPapers)
JEL-codes: L60 O13 Q21 Q28 (search for similar items in EconPapers)
Date: 2008-05
New Economics Papers: this item is included in nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
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