Environmental policy and the reduction of hazardous waste

Abstract

Environmental policy encouraging hazardous waste reduction began in 1976 with an Environmental Protection Agency statement promoting source reduction as the preferred method of hazardous waste management. In 1984, Congress included a policy statement supporting waste reduction in the Hazardous and Solid Waste Amendments (HSWA). However, the cornerstone of HSWA was the land disposal restrictions (LDRs)—a command and control policy prohibiting land disposal of untreated hazardous waste. Consideration of the hazardous waste generation decision in the aggregate would suggest that the price effect resulting from the LDR program and increased hazardous waste management prices in general would lead to source reduction. Although at the firm level there may be interdicting factors, statistical analysis of generation data for Tennessee support this hypothesis. Both the institution of the LDRs and waste management prices have significant negative effects on the level of generation. The analysis, however, reveals the existence of large industry and firm effects, indicating that the response to public policy may exhibit significant variance, especially at the individual generator level.