Working Paper: NBER ID: w20879
Authors: Joseph S. Shapiro; Reed Walker
Abstract: Between 1990 and 2008, air pollution emissions from U.S. manufacturing fell by 60 percent despite a substantial increase in manufacturing output. We show that these emissions reductions are primarily driven by within-product changes in emissions intensity rather than changes in output or in the composition of products produced. We then develop and estimate a quantitative model linking trade with the environment to better understand the economic forces driving these changes. Our estimates suggest that the implicit pollution tax that manufacturers face doubled between 1990 and 2008. These changes in environmental regulation, rather than changes in productivity and trade, account for most of the emissions reductions.
Keywords: pollution; manufacturing; environmental regulation; productivity; trade
JEL Codes: F18; F64; H23; Q56
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increased environmental regulation (F64) | emissions reductions (Q52) |
| increased implicit pollution tax (H23) | emissions reductions (Q52) |
| environmental regulation (Q58) | emissions intensity (L94) |
| productivity (O49) | pollution per unit of output (Q53) |
| trade costs (F19) | firm behavior regarding emissions (Q52) |
| regulatory changes (G18) | pollution outcomes (Q53) |
| changes in emissions intensity (O44) | changes in overall emissions (Q54) |