1. 1 Do State Pollution Rankings Affect Facility Emissions? Evidence From The U.S. Toxic Release Inventory, by Jason Scorse http://are.berkeley.edu/~sberto/TRI-Draft.pdf http://are.berkeley.edu/~sberto/TRI-Draft.pdf For eep142 lecture presentation Based on presentation by Kyriakos Drivas and Erick Gong

2. Information EEP 1422 Right to Know Programs Coase Theorem Asymmetric information leads to inefficient outcomes (externalities) High transaction costs associated with collecting data Solution: Right to Know Programs Government mandates private firms to release environmental data Importance: Decreasing information asymmetries can lead to a reduction in externalities

3. Information EEP 1423 Toxic Release Inventory (TRI) Emergency Planning and Community Right to Know Act (EPCRA) (1986) EPCRA Section 313: Firms required to disclose their chemical emissions Coverage: Water and air emissions; 667 chemicals listed Overall 20,000 TRI facilities covered nationwide

4. Information EEP 1424 RankFacilityCityPounds 1SHELL OIL PRODS. U.S. MARTINEZ REFY.MARTINEZ1,142,142 2TESORO REFINING & MARKETING CO.MARTINEZ1,064,658 3CHEVRON PRODS. CO. RICHMOND REFY.RICHMOND999,328 4CONOCOPHILLIPS SAN FRANCISCO REFY.RODEO415,112 5C&H SUGAR CO. INC.CROCKETT302,100 6CONOCOPHILLIPS CARBON PLANTRODEO157,380 7DOW CHEMICAL CO.PITTSBURG76,386 8USS-POSCO INDS.PITTSBURG39,840 9AIRGAS DRY ICERICHMOND35,496 10BOC GASESRICHMOND29,903 11SILGAN CONTAINERS MFG. CORP.ANTIOCH20,236 12CRITERION CATALYSTS & TECHS. L.P.PITTSBURG16,969 13BP RICHMOND TERMINALRICHMOND11,892 14MARBLE SHOP INC.PITTSBURG10,671 15RHODIA INC.MARTINEZ9,123 16CONOCOPHILLIPS RICHMOND TERMINALRICHMOND7,513 17STEELSCAPERICHMOND7,504 18GENERAL CHEMICAL CORP.RICHMOND6,507 19SHELL CHEMICAL CO. MARTINEZ CATALYST PLANTMARTINEZ6,024 20AIR PRODS. MFG. CORP. MARTINEZ WATERFRONT RDMARTINEZ 5,595

5. Information EEP 1425 Reported Environmental Releases from TRI Sources in 2002 RankFacilityCityPounds 1NEW UNITED MOTOR MFG. INC.FREMONT499,459 2ARCH MIRROR WESTNEWARK44,985 3PACIFIC GALVANIZING INC.OAKLAND23,445 4ACME FIBERGLASS INC.HAYWARD14,147 5U.S. PIPE & FNDY. CO. INC.UNION CITY13,995 6HEXCEL CORP.LIVERMORE13,107 7OWENS-BROCKWAY GLASS CONTAINER INC. PLANT #20OAKLAND12,179 8ISOLA LAMINATE SYS. CORP.FREMONT10,099 9BORDEN CHEMICAL INC.FREMONT8,107 10OATEY CO.NEWARK7,200 11AXT INC.FREMONT7,097 12 ENGINEERED POLYMER SOLUTIONS INC. (DBA VALSPAR COATINGS) HAYWARD4,409 13CLEVELAND STEEL CONTAINER CORP.OAKLAND3,900 14U.S. DOE LLNL EXPERIMENTAL TEST SITE (SITE 300)TRACY3,899 15WYMAN GORDON CO. SAN LEANDRO 3,333 16TRIANGLE COATINGS INC. SAN LEANDRO 3,288 17W. R. GRACE & CO. CONN. DAREX CONTAINER PRODS. SAN LEANDRO 2,327 18ROHM & HAAS CO.HAYWARD2,012 19GILLIG CORP.HAYWARD1,854 20B & P MARBLE INC.OAKLAND1,363

6. Information EEP 1426 Effects of TRI data How does TRI lead to lower pollution? Possible Channels: Political pressure Green consumerism Future liability Future expansion

7. Information EEP 1427 Objective We focus on the Top 10 Polluters lists Objective: Examine whether firms alter their toxic emissions based on their state pollution rankings Why State Pollution Rankings? Policy reason: Political pressure is more intense in local level Econometric reason: Quasi-Experiment

8. Information EEP 1428 Methodology: Quasi-Experiment First-Best: Randomly create and disclose rankings in different states Second-Best: Observe an exogenous shock in state rankings and identify the change in emissions: In 1998 seven additional industries (big polluters) entered the TRI

9. Information EEP 1429 An Example: CO vs. CT

10. Information EEP 14210 An Example: CO vs. CT

11. Information EEP 14211 Data: An Overview For each firm: Total emissions State rankings Various facility-specific characteristics Public disclosure takes place a year and a half after the end of any given reporting year Top 10 Polluters account for 14- 42% of total emissions from 1988- 2001

12. Information EEP 14212 Setup Model: Δemissions= β 1 xBaseRanking + β 2 xRankChange + …. Δemissions < 0 Theory: β 1 >0: The higher you are in rankings (bigger polluter), the more you will reduce emissions (negative) β 2 >0: The more you will drop in rankings (bigger number), the less you will reduce emissions (negative)

13. Information EEP 14213 Example Firm A is ranked #2 in overall emissions. If its ranking changed from #2 to #15 it will have less incentive to decrease its emissions levels (less public scrutiny), hence B1 is positive (change in emissions is less OR firm pollutes more) If its ranking change is a positive number (i.e. 15- 2=13) then multiply 13*B2 to get the increase in emissions

14. Information EEP 14214 Example β 1 >0: β 2 >0 :

15. Information EEP 14215 Top 100 State Facilities

16. Information EEP 14216 Conclusions Top 10 Polluters List forces these firms to reduce their total emissions Decrease in state rankings reduces incentives by firms to reduce their emissions Policy Implications: TRI might be a cost-effective way to reduce emissions At each expansion of TRI there will be firms that might increase their emissions

17. Information EEP 14217 Future Research Channels that TRI are working through to reduce pollution

18. Information EEP 14218 Example of Chemicals Tracked Alameda County 2002 1GLYCOL ETHERS182,404 2XYLENE (MIXED ISOMERS)114,879 3N-BUTYL ALCOHOL65,654 4TOLUENE36,854 51,2,4-TRIMETHYLBENZENE34,661 6METHANOL33,904 7AMMONIA33,227 8METHYL ISOBUTYL KETONE32,950 9ETHYLENE GLYCOL32,032 10METHYL ETHYL KETONE31,122 11STYRENE16,871 12BARIUM COMPOUNDS11,241 13M-XYLENE10,381 14N,N-DIMETHYLFORMAMIDE7,003 15LEAD5,452 16ZINC COMPOUNDS5,106 17ETHYLBENZENE5,000 18CUMENE4,450 19N-HEXANE3,960 20FORMALDEHYDE3,542