Does the European Pollutant Release and Transfer Register Enable Us to Understand the Environmental Performance of Firms?

Abstract

ABSTRACTThe study explores a new micro environmental data set, the European Pollutant Release and Transfer Register (E‐PRTR), by identifying limitations and potential strengths. We find that reporting requirements exclude on‐site abatement through end‐of‐the‐pipe techniques and cleaner technologies causing underestimation of firms' actual abatement. In addition, the lack of a mandatory section on production volume and firm size hinders data normalization and the use of control variables in economic analysis. Addressing the above limitations can make the E‐PRTR more usable for policy‐makers, environmentalists and academicians. Furthermore, the paper proposes a normalization procedure based on calculating how much beyond the threshold a firm has abated or emitted; and normalized values are used to approximate the environmental performance of firms. Analysis based on a sample of manufacturing firms suggests that industrial facilities in Europe have performed well in terms of abating a higher percentage of their gross pollution. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.