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When do firms go green? : Comparing price incentives with command and control regulations in India

Author: Ann E Harrison; Benjamin Hyman; Leslie A Martin; Shanthi Nataraj; National Bureau of Economic Research,
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2015.
Series: Working paper series (National Bureau of Economic Research), no. 21763.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
India has a multitude of environmental regulations but a history of poor enforcement. Between 1996 and 2004, India's Supreme Court required 17 cities to enact Action Plans to reduce air pollution through a variety of command-and-control (CAC) environmental regulations. We compare the impacts of these regulations with the impact of changes in coal prices on establishment-level pollution abatement, coal consumption,  Read more...
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Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Ann E Harrison; Benjamin Hyman; Leslie A Martin; Shanthi Nataraj; National Bureau of Economic Research,
OCLC Number: 932308310
Notes: "November 2015"
Description: 1 online resource (45 pages) : illustrations, map.
Series Title: Working paper series (National Bureau of Economic Research), no. 21763.
Responsibility: Ann Harrison, Benjamin Hyman, Leslie Martin, Shanthi Nataraj.

Abstract:

India has a multitude of environmental regulations but a history of poor enforcement. Between 1996 and 2004, India's Supreme Court required 17 cities to enact Action Plans to reduce air pollution through a variety of command-and-control (CAC) environmental regulations. We compare the impacts of these regulations with the impact of changes in coal prices on establishment-level pollution abatement, coal consumption, and productivity growth. We find that higher coal prices reduced coal use within establishments, with price elasticities similar to those found in the US. In addition, higher coal prices are associated with lower pollution emissions at the district level. CAC regulations did not affect within-establishment pollution control investment or coal use, but did impact the extensive margin, increasing the share of large establishments investing in pollution control and reducing the entry of new establishments. For reducing SO2 emissions, our results suggest that higher coal prices were more effective in improving environmental outcomes than command and control measures.

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