EPA's toxic release inventory: stimulus and response

Abstract

The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) and its 1986 amendments (SARA), known collectively as Superfund, is one of the most widely criticized of the federal environmental statutes. The fact that so much has been spent on litigation and so little in cleaning sites far overshadows the apparent benefits of more than 3000 emergency temporary actions taken to remove hazardous materials from some 2700 locations. In spite of the poor reputation generated by the failed cleanup program, a frequently overlooked feature of the 1986 Superfund is sometimes referred to as one of the nation’s most effective environmental statutes. How can this be? The 1986 appended feature has nothing to do with clearing away waste from abandoned sites. It codifies the public’s ‘right-to-know’ about emissions from individual industrial plants nationwide that for the most part are operating within the limits of their EPA-approved permits. The right-to-know is addressed by an annual report called the Toxics Release Inventory (TRI). The TRI gives detailed data, in pounds, for annual emissions to air, water and land of 650 named pollutants. The TRI is termed effective because industrial plants already in compliance with EPA rules have voluntarily responded to the annual TRI listing by redoubling their efforts to reduce the volume of emissions reported on the TRI. As shown by Konar and Cohen, large investments in reputational capital are at stake; no major firm wants to be listed as one of the ‘dirty dozen’. Communities in the vicinity of one of the dirty dozen may feel even more strongly about the matter. The term ‘toxics release’ says enough. To them, if it is called toxic, then it should be reduced. But while the TRI may be an effective stimulus for emission reduction, it is not clear that the induced responses are cost beneficial. In some cases, industrial firms allocate large amounts of control capital to reduce TRI emissions that are far less harmful than other pollutants that might otherwise be controlled. This article focuses on the TRI as a pollution control instrument. The research we report addresses two sets of questions: First, what is the history of TRI? Where did the list come from? How has industry responded? Then, what are the determinants of TRI emissions across the 50 states? Is industry response shaped by regulatory action or by public stimulus? The next section of the article addresses the first set of questions. That discussion is followed by a theoretical and empirical section that addresses the second set. Having reported and discussed our empirical findings, a short final section concludes the article.