Pollution Prevention Activities Research Articles

Environmental Liabilities, Borrowing Costs, and Pollution Prevention Activities: The Nationwide Impact of the Apex Oil Ruling

Environmental Liabilities, Borrowing Costs, and Pollution Prevention Activities: The Nationwide Impact of the Apex Oil Ruling

Too Costly to Disregard: The Cost Competitiveness of Environmental Operating Practices

Achieving the dual goal of improved environmental and financial performance has become a universal business concern. Our study distinguishes between firms’ environmental behaviors and their environmental performance, a distinction that has been largely disregarded in previous empirical studies that analyze the association between environmental performance and financial performance. As an improvement in environmental performance itself does not necessarily guarantee positive financial returns, our study pays particular attention to the value-added nature of preemptive environmental activities, investigating the effects of plant-level pollution prevention activities (PPAs) on environmental performance and financial performance in terms of cost competitiveness and market valuation. Drawing on detailed environmental information about 18,743 chemical plants in the U.S. and analyzing a multi-level panel dataset constructed bottom-up from plant-level data to their parent firms’ performance data, we find that more intensive PPAs are associated with both superior environmental performance and improved cost competitiveness but do not necessarily lead to higher market valuation. Our study illuminates the specific environmental activities and conditions linked to environmental and financial performance, thereby offering managers practical guidance in pursuing both sustainable and profitable businesses under increasingly stringent environmental standards.

The impact of management systems on technical change: the adoption of pollution prevention techniques

A firm’s capability to innovate is influenced by its organizational structure. We examine the effect of Total Quality Environmental Management (TQEM) on the adoption of innovative pollution prevention activities over the period 1992–1996, and show that the rate of innovation increases following the adoption of TQEM. However, the effect of TQEM on pollution prevention innovation “wears out” over time. Our analysis indicates that this is likely because pollution prevention undertaken in one year continues to be effective in future years. This, in turn, reduces the incentives for further innovation due to declining marginal returns, rather than because the institutional effectiveness of TQEM weakens. We provide corroborative evidence based on the time profile of pollution prevention of firms that adopted TQEM prior to the start of our sample, and also develop a stylized model with (partial) obsolescence of pollution prevention innovations that matches the empirical regularities we obtain. Our findings shed light on the importance of organizational structure on the pace of technical change.

The Impact of Management Systems on Technical Change: The Adoption of Pollution Prevention Techniques

A firm’s capability to innovate is influenced by its organizational structure. We examine the effect of Total Quality Environmental Management (TQEM) on the adoption of innovative pollution prevention activities over the period 1992-1996, and show that the rate of innovation increases following the adoption of TQEM. However, the effect of TQEM on pollution prevention innovation “wears out” over time. Our analysis indicates that this is likely because pollution prevention does not completely become obsolete, which reduces the incentives for further innovation in subsequent years, rather than because the institutional effectiveness of TQEM weakens. We provide corroborative evidence based on the time profile of pollution prevention of firms that adopted TQEM prior to the start of our sample, and also develop a stylized model with (partial) obsolescence of pollution prevention innovations that matches the empirical regularities we obtain. Our findings shed light on the importance of organizational structure on the pace of technical change.

Willingness to Pay to Overcome Pollution in Tapak River, Semarang

This study aims to analyze the level of Willingness to Pay of the community around TapakTugurejo Village, TuguSubdistrict, Semarang City in pollution prevention efforts on the Tapak River. This study offers a water purification model with the slow sands filtration method to improve water quality on the Tapak River. The analysis used was hypothetical market, Contingent Valuation Method (CVM), and multiple linear regression analysis to determine the Willingness to Pay relationship with other influencing factors, such as income, education, and age. Data was obtained from 30 respondents who were residents in RW04 TapakTugurejo Village, Semarang. Sample collection used in this study was the strategic random sample method. Hypothetical Market Value of respondents determines the willingness to pay for river pollution prevention efforts. The results found that the average cost of willingness to pay (WTP) of respondents for river pollution prevention activities from 30 respondents was Rp. 14,000.00. The total cost of WTP per year must be paid by the community from the loss of mangroves in the Tugurejo Village with a population of 6,941 people, was Rp 97,174,000.00.

Tracing the Influence of Corporate Environmental Practices on Environmental and Financial Returns

Despite a recent surge of empirical studies examining associations between corporate environmental performance and financial performance, researchers have been unable to give an integrated account of the mechanisms that link the two. The practical implications of this research stream thus remain limited, offering managers little guidance in their efforts to improve environmental and financial performance. This study of the U.S. chemical industry addresses that gap by analyzing how firms’ environmental management practices and resulting environmental performance may be related to their financial performance, illuminating the type and scope of relevant environmental practices conducted at the plant level of firms. Drawing on detailed environmental information about 18,743 chemical plants and financial information about their 455 parent firms, we investigate the plants’ pollution prevention activities (PPAs) and their broader impacts on environmental performance and financial outcomes in terms of cost competitiveness and market valuation. The results reveal that more-intensive PPAs are associated with both superior environmental performance and improved cost competitiveness, but do not necessarily lead to higher market valuation. The study also establishes that proactive PPAs implemented to improve environmental performance at the plant level are associated with cost competitiveness when those practices directly improve existing production processes and the selected financial measurement is well suited to capture such improvements.

Environmental management practices, environmental technology portfolio, and environmental commitment: A content analytic approach for UK manufacturing firms

This study investigates how various aspects of environmental management practices EMPs (operational, strategic, and tactical) undertaken by firms influence their environmental technology portfolios ETPs (pollution control and pollution prevention). It also explores the role of environmental commitment of firms on the influence of EMPs on ETPs. This study uses data from content analysis of annual reports, and corporate social responsibility reports available from corporate websites of 76 UK manufacturing firms from eight different industrial sectors across two years using a time lag (2010–2012). We have controlled for industry type, economic performance and firm size in all our analyses. The findings of our study show that operational and tactical practices influence both the ETPs significantly but strategic practices influence only pollution prevention activities of firms. Further, we have found that environmental commitment positively moderates the influence of operational and tactical practices on pollution prevention but not on pollution control activities. There is no such moderating role on the influence of strategic practices on either pollution prevention or pollution control. Our finding generally highlight the short-term pollution control view; manufacturers focus on cost saving, operational efficiency, and being compliant with the environmental regulations rather than having a long-term strategy perspective. The use of strategic practices tends to have stronger influence on long-term pollution prevention activities. Once firms improve their level of environmental commitment, their involvement in long-term pollution prevention activities improve.

From Board Composition to Corporate Environmental Performance Through Sustainability-Themed Allainces

From Board Composition to Corporate Environmental Performance Through Sustainability-Themed Allainces

Does Pollution Prevention Reduce Toxic Releases? A Dynamic Panel Data Model

This paper investigates the effectiveness of voluntary pollution prevention activities in reducing toxic releases of facilities that report to the Toxics Release Inventory (TRI) from 1991-2001 using GMM dynamic panel data models that recognize the potential endogeneity of the pollution prevention adoption decision on toxic releases. We find that pollution prevention adoption had a negative impact on toxic releases over this period. The estimated coefficients suggest that the effect of the introduction of pollution prevention techniques is substantial, but short-lived, dissipating within 4-5 years. However, a continual adoption of pollution prevention techniques leads to lower steady-state toxic emissions, with estimated reductions in the 35-50% range (depending on specification).

Does Pollution Prevention Reduce Toxic Releases? A Dynamic Panel Data Model

We investigate the effectiveness of voluntary pollution prevention activities in reducing toxic releases from facilities that reported to the U.S. Environmental Protection Agency’s Toxics Release Inventory from 1991–2001, using generalized method of moments dynamic panel data models that recognize the potential endogeneity of the pollution prevention adoption decision on toxic releases. We find that pollution prevention adoption had a negative impact on toxic releases. The estimated coefficients suggest that the effect of pollution prevention adoption is substantial, but short-lived, dissipating within 4 to 5 years. However, a continual adoption of pollution prevention techniques leads to lower steady-state releases, with estimated reductions between 35% and 50%. <i>(JEL Q53, Q55)</i>

Green management and the nature of pollution prevention innovation

Management systems have a strong impact on the level of innovation and on production operations. Understanding this impact sheds light on how firms function. This article examines the relationship between a firm’s approach to environmental management and the nature of the pollution prevention activities or practices that it undertakes. We differentiate pollution prevention activities according to (i) four functional characteristics and (ii) visibility to consumers. We find that the application of the total quality management (TQM) approaches on pollution prevention has a stronger effect for practices that involve procedural changes or are of a customized nature. These are indeed the type of practices where one would expect TQM to have a disproportionate impact in decision-making effectiveness. There seems to be no corresponding effect on the adoption of practices that are visible to consumers. Our results corroborate the notion that a well-designed management system can help stimulate innovation, but only for specific types. They also help identify the types of firms that are more likely to benefit from adoption of TQM principles.

Decomposition analysis of air pollution abatement in China: empirical study for ten industrial sectors from 1998 to 2009

Abstract This study analyzes the management of air pollutant substance in Chinese industrial sectors from 1998 to 2009. Decomposition analysis applying the logarithmic mean divisia index is used to analyze changes in emissions of air pollutants with a focus on the following five factors: coal pollution intensity (CPI), end-of-pipe treatment (EOP), the energy mix (EM), productive efficiency change (EFF), and production scale changes (PSC). Three pollutants are the main focus of this study: sulfur dioxide (SO2), dust, and soot. The novelty of this paper is focusing on the impact of the elimination policy on air pollution management in China by type of industry using the scale merit effect for pollution abatement technology change. First, the increase in SO2 emissions from Chinese industrial sectors because of the increase in the production scale is demonstrated. However, the EOP equipment that induced this change and improvements in energy efficiency has prevented an increase in SO2 emissions that is commensurate with the increase in production. Second, soot emissions were successfully reduced and controlled in all industries except the steel industry between 1998 and 2009, even though the production scale expanded for these industries. This reduction was achieved through improvements in EOP technology and in energy efficiency. Dust emissions decreased by nearly 65% between 1998 and 2009 in the Chinese industrial sectors. This successful reduction in emissions was achieved by implementing EOP technology and pollution prevention activities during the production processes, especially in the cement industry. Finally, pollution prevention in the cement industry is shown to result from production technology development rather than scale merit.

Green Management and the Nature of Pollution Prevention Innovation

Management systems have a strong impact on the level of innovation and on production operations. Understanding this impact sheds light on how firms function. This paper examines the relationship between a firm’s approach to environmental management and the nature of the pollution prevention activities or practices that it undertakes. We differentiate pollution prevention activities according to (i) four functional characteristics and (ii) visibility to consumers. We find that the application of the Total Quality Management approaches on pollution prevention has a stronger effect for practices that involve procedural changes or are of a customized nature. These are indeed the type of practices where one would expect Total Quality Management to have a disproportionate impact in decision-making effectiveness. There seems to be no corresponding effect on the adoption of practices that are visible to consumers. Our results corroborate the notion that a well-designed management system can help stimulate innovation, but only for specific types. They also help identify the types of firms that are more likely to benefit from adoption of Total Quality Management principles.

Negotiations on Environmental Goods with WTO and Sustainable Development

Doha Round of negotiations on environmental goods and services are continuing without resulting in any gainful output. The basic challenge of negotiations on environment is emerged on definitional approach of environmental goods because neither internationally agreed definition of Environmental Goods (EGs) nor any agreed criteria for their classification is specified. However, suggested definitions have varied between limited primarily to “pollution prevention activities” to “extending beyond simple end-use criteria”. The paper attempted to examine various definitions of environmental goods developed from time to time besides estimating time series analysis of export and import data. The paper is also focused on environmental goods in which India has comparative advantage and elaborates the potential for negotiations on environmental goods in India.

Motivations and Barriers to Corporate Environmental Management

ABSTRACTThis paper integrates two conceptual frameworks, utility maximization and institutional theory, to analyze voluntary corporate environmental management. The utility maximization or economic approach centers on motivations to decrease cost, increase revenue and improve manager utility. Institutional theory emphasizes how external pressures from market and non‐market constituents shape the firm's environmental efforts. We view the two frameworks as complementary and postulate a model that includes both types of influences. Survey data from six major industries consisting of a diverse set of facilities are used to estimate the effects of economic and institutional factors on a facility's use of environmental practices and pollution‐prevention activities. Our results support the hypothesized model, and show that cost barriers, management attitudes toward environmental stewardship, company ownership and external institutional forces, including competitiveness, investor and regulatory pressures, all affect a facility's environmental practices and pollution prevention activities. Findings suggest that a multifaceted policy strategy is needed to advance corporate environmental management across diverse firms. Copyright © 2012 John Wiley &amp; Sons, Ltd and ERP Environment

Greening of industries in Bangladesh: pollution prevention practices

Industry has contributed to serious and widespread deterioration in the quality of water, land and air in Bangladesh. The objectives of the study are: to document pollution prevention options and their current use in Bangladesh; to compare practices across five different highly polluting industries; and to contribute to the pollution prevention literature from a developing country's perspective. The study is an exploratory one, using both primary and secondary data. Five industries were selected from the top-ten environment polluting industries in Bangladesh; these are the tannery, pulp & paper, fertilizer, textile and cement industries. From each industry group, two sample plants were selected with five executives participating from each plant. This study highlights the reality of Bangladeshi industrial plants in applying pollution prevention initiatives. It reveals that compared to leading firms in developed countries, pollution prevention initiatives in Bangladesh are considerably underutilized. All of the industries undertook some pollution prevention activities, though each of them had potential for improvement. For example, none of the case sites engaged in pollution prevention through designing environmentally compatible products.

Two-stage adoption of different types of pollution prevention (P2) activities

Pollution prevention (P2) remains the key pollution reduction strategy in the US despite its limited success in improving environmental performance. To aid the targeting of policies to promote the types of P2 that achieve environmental goals, this study investigates the intricate nature of P2 adoption by (1) distinguishing among three types of P2: procedural changes, input and material changes and equipment and product changes, (2) disentangling the adoption decision into a binary and a count decision, and (3) analyzing benefit- and cost-related factors. Using a sample of facilities of S&P 500 firms, I employ NB hurdle models to analyze how facilities respond to these factors in making P2 adoption decisions. I find that facilities that have lower cost of adoption due to past P2 experience have higher likelihood of adoption and higher rates of adoption of all types of P2. However, those exposed to greater threat of enforcement action find limited scope for P2 in achieving environmental compliance objectives. Some regulatory threat variables even have a negative effect. Facilities also adopt P2 to enjoy market-related benefits: final good producers are more likely to adopt P2 that appeal to consumers (input and material changes), while intermediate good producers are more likely to adopt P2 that is valued by its supply chain (procedural changes). Community characteristics and other knowledge sources are not always positively associated with the likelihood of adoption nor with the rate of adoption.

Are Management-Based Regulations Effective?: Evidence from State Pollution Prevention Programs

This paper evaluates the effectiveness of management-based regulations in reducing pollution. Management-based regulations do not establish strict pollution reduction standards, but rather require each regulated entity to engage in its own review and planning process and develop a set of internal rules and initiatives consistent with achieving reductions in pollution. I develop a model of facility-level response to management-based regulation that provides predictions about the circumstances under which these regulations are likely to be effective. I then test these predictions empirically by taking advantage of a natural policy experiment that occurred when fourteen states adopted management-based regulations for toxic chemical control in the 1990s. Using panel data for just over 31,000 manufacturing plants in the United States, I investigate whether facilities subject to management-based regulations had larger changes in total quantities of toxic chemical releases, engaged in more pollution prevention activities, or reported fewer toxic chemicals to the Toxics Release Inventory. The analysis suggests that management-based regulation has had a measurable positive effect on the environmental performance of manufacturing plants. In particular, plants subject to management-based regulation experienced larger decreases in total pounds of toxic chemicals released and were more likely to engage in source reduction activities.

Are management‐based regulations effective? Evidence from state pollution prevention programs

AbstractThis paper evaluates a recent innovation in regulating risk called management‐based regulation. Traditionally, risk regulation has either specified a particular means of achieving a risk‐reduction goal or specified the goal and left the means of achieving that goal up to the regulated entity. In contrast, management‐based regulation neither explicitly imposes the means, nor the ends. Rather, what is required is that each regulated entity review its production processes and develop a set of goals and procedures that will reduce risk. I evaluate the effectiveness of management‐based regulation by taking advantage of policy variation that occurred when 14 states adopted such regulations for toxic chemical control in the 1990s. Using panel data for just over 31,000 manufacturing plants in the United States, I investigate whether facilities subject to management‐based regulations had larger changes in total quantities of toxic chemical releases, engaged in more pollution prevention activities, or reported fewer toxic chemicals to the Toxics Release Inventory (TRI). The results indicate that management‐based regulation has had a measurable positive effect on the environmental performance of manufacturing plants. In particular, plants subject to management‐based regulation experienced larger decreases in total pounds of toxic chemicals released and were more likely to engage in source reduction activities. © 2007 by the Association for Public Policy Analysis and Management

Governance and Performance: Theory‐Based Evidence from U.S. Coast Guard Inspections

Law enforcement by the U.S. Coast Guard (USCG) is characterized by soft penalties for safety violations, low incidence of penalties relative to the number of violations, and substantial resources devoted to inspections of vessels. Under what conditions can such an enforcement strategy be effective? And is it? This article seeks answers to these two questions. Harrington's (1988) model is motivated by such facts about U.S. regulation in general, and provides an answer to the first question via targeting of good and poor performers. The model generates hypotheses about optimal regulation in the context of pollution prevention activities of the USCG. In order to answer the second question, an organization‐level panel data set consisting of thousands of U.S. flag tank barges is constructed and those hypotheses tested. A count model that controls for vessel heterogeneity yields mixed evidence. If USCG inspections are considered exogenous variables (as the theory presumes), they appear to prevent pollution spills. But if inspections are endogenous and respond to previous spills, then correcting for endogeneity reverses the earlier result. In addition, violations are found to be good predictors of pollution occurrences, suggesting that inspections are not as effective as they could be. Targeting, as in Harrington's model, therefore appears to be incomplete, and the findings suggest that more complete targeting could increase performance. An interesting finding is that stronger penalties could increase performance.