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Pricing carbon emissions from an individual jurisdiction may harm the competitiveness of local firms, causing the leakage of emissions and economic activity to other regions. Past research concentrates on national carbon prices, but the impacts of subnational carbon prices could be more severe due to the openness of regional economies. We specify a flexible model to capture competition between a plant in a state with electric sector carbon pricing and plants in other states or countries without such pricing. Treating energy prices as a proxy for carbon prices, we estimate model parameters using confidential plant-level Census data, 1982–2011. We simulate the effects on manufacturing output and employment of carbon prices covering the Regional Greenhouse Gas Initiative (RGGI) in the Northeast and Mid-Atlantic regions. A carbon price of $10 per metric ton on electricity output reduces employment in the regulated region by 2.1 percent, and raises employment in nearby states by 0.8 percent, although these estimates do not account for revenue recycling in the RGGI region that could mitigate these employment changes. The effects on output are broadly similar. National employment falls just 0.1 percent, suggesting that domestic plants in other states as opposed to foreign facilities gain the most jobs from state or regional carbon pricing.

We test whether environmental regulation affects investment decisions, using Census data for individual paper mills. New mills in states with strict environmental regulations choose cleaner production technologies, with differences in air and water pollution regulation also influencing technology choice. Examining investment allocation across existing plants, we find that abatement and productive investment tend to be scheduled together. However, plants with high abatement investment over the entire period spend significantly less on productive capital. This seems to reflect both environmental investment 'crowding out' productive investment within a plant, and firms shifting investment towards plants facing less stringent abatement requirements.

This paper considers how industry focused revenue rebating could be used to address competitiveness concerns arising from a unilaterally imposed carbon tax. It focuses on the use of output-based carbon credits tied to best practices in the sector and considers its efficiency and administrative characteristics. It also investigates whether firms have sufficient tax appetite to use such a credit. Such a credit for firms in energy intensive, trade exposed (EITE) sectors could provide compensation for firms and mitigate to some extent competitiveness issues. Some firms, however, would not be able to utilize all of their carbon credits due to insufficient tax appetite.

This study examines the impact of OSHA inspections on injuries in manufacturing plants. The authors use the same model and some of the same plant-level data employed by several earlier studies that found large effects of OSHA inspections on injuries for 1979-85. These new estimates indicate that an OSHA inspection imposing a penalty reduced lost-workday injuries by about 19% in 1979-85, but that this effect fell to 11% in 1987-91, and to a statistically insignificant 1% in 1992-98. The authors cannot fully explain this overall decline, which they find for nearly all subgroups they examine-by inspection type, establishment size, and industry, for example. Among other findings are that, across the years studied, inspections with penalties were more effective than those without, and the effects on injury rates were greater in smaller plants and nonunion plants than in large plants and union plants.

This paper examines the determinants of environmental performance at paper mills, measured by air pollution emissions per unit of output. We consider differences across plants in air pollution abatement expenditures, local regulatory stringency, and productive efficiency. Emissions are significantly lower in plants with a larger air pollution abatement capital stock: a 10 percent increase in abatement capital stock appears to reduce emissions by 6.9 percent. This translates into a sizable social return: one dollar of abatement capital stock is estimated to provide an annual social return of about 75 cents in pollution reduction benefits. Local regulatory stringency and productive efficiency also matter: plants in non-attainment counties have 43 percent lower emissions and plants with 10 percent higher productivity have 2.5 percent lower emissions. For pollution abatement operating costs we find (puzzlingly) positive, but always insignificant, coefficients.

In the face of strong policy interest in the possible regulation–jobs linkage and weak analytical evidence to support a generalizable conclusion, what should a regulatory agency like the Environmental Protection Agency do in a regulatory impact analysis (RIA)? Initially, an RIA should start with a clear concept of what the regulatory agency is trying to estimate. Much of the popular debate is looking for a total job effect. Yet one thing we do know is that, in aggregate, there will not be a net job change unless the economy deviates from its normal rate of full employment. The gist of our literature review suggests that looking to historic data for stable statistical relationships between regulatory spending and job changes, even in a single industry, is tenuous at best. However, the intuition is relatively easy to trace out with certain assumptions: (1) added costs imply added activity that entails added jobs; (2) higher product prices or other regulatory limits imply less production that entails fewer jobs. Taking an average employment rate per dollar of relevant economic activity, coupled with an assumed demand elasticity, these effects can be multiplied out into job changes, although such simple calculations must be tested by validating key assumptions or exploring the estimates sensitivity to alternatives. New estimates by Belova, Gray, Linn and Morgenstern [(2013a). Environmental Regulation And Industry Employment: A Reassessment . Center for Economic Studies, U.S. Census Bureau Discussion Paper, CES 1336, July.] indicate that extending and expanding the widely cited approach by Morgenstern, Pizer and Shih [(2002). Jobs Versus the Environment: An Industry-Level Perspective. Journal of Environmental Economics and Management, 43 , 412–436] is unlikely to be successful. Finally, more effort is needed to inform the public about the potential job impacts of new regulations, especially the distinction of these impacts from long-term technological and economic trends.

This study examines economic performance, environmental performance, and regulatory activity for plants in three industries: pulp and paper, oil, and steel. Stochastic frontier production function models show significant deviations from production efficiency. Older plants are less efficient in production, but perform no worse on emissions. Plants spending more on pollution abatement tend to do worse on both production efficiency and emissions. Stricter local regulatory pressure is associated with somewhat lower emissions, but has mixed effects on production efficiency. Positive correlations between SUR residuals for emissions and production efficiency suggest unmeasured plant-level characteristics that drive both economic and environmental performance.

We compare models of Occupational Safety and Health Administration (OSHA) and Environmental Protection Agency (EPA) enforcement and compliance for steel plants during the 1980s. We find that OSHA and EPA respond similarly to plant-level compliance and measures of hazardousness, but differently to firm-level compliance and risks of plant closing, and we relate the differences to the agencies' differing organizational structures. Plant-level compliance is affected by enforcement pressure, compliance costs, and the firm's overall compliance behavior in similar ways for the two regulatory areas, but environmental compliance was also sensitive to plant size and risk of closing. Finally, we find that the likelihood that a plant was in compliance with one agency seemed at most weakly related to whether it was in compliance with the other, but that plants likely to receive enforcement attention from one agency were also more likely to receive enforcement attention from the other agency.

Regression analysis is employed to examine the impact on productivity growth of government regulation, specifically worker health and safety regulation by the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA). The analysis concentrates on total factor productivity (TFP) measures of productivity growth, which consider the contribution of all productive inputs to output growth. Data are obtained for 450 US manufacturing industries for the period 1958-1978 from the Annual Survey of Manufacturers and the Census of Manufacturers. The results show that OSHA and EPA regulation reduced productivity growth in the average manufacturing industry by .44 percentage points per year, over 30% of the slowdown on the 1970s. The effect of OSHA is found to be quite strong, while that of the EPA is comparatively weak. There also is evidence that pollution-abatement spending only affected the measurement of productivity growth, with no real effect on productivity inputs used in production.