Does Pollution Prevention Reduce Toxic Releases? A Dynamic Panel Data Model
This paper investigates the effectiveness of voluntary pollution prevention activities in reducing toxic releases of facilities that report to the Toxics Release Inventory (TRI) from 1991-2001 using GMM dynamic panel data models that recognize the potential endogeneity of the pollution prevention adoption decision on toxic releases. We find that pollution prevention adoption had a negative impact on toxic releases over this period. The estimated coefficients suggest that the effect of the introduction of pollution prevention techniques is substantial, but short-lived, dissipating within 4-5 years. However, a continual adoption of pollution prevention techniques leads to lower steady-state toxic emissions, with estimated reductions in the 35-50% range (depending on specification)