Regulating Mismeasured Pollution: Implications of Firm Heterogeneity for Environmental Policy
AEA Papers and Proceedings
vol. 108,
May 2018
(pp. 136-42)
Abstract
This paper provides the first estimates of within-industry heterogeneity in energy and CO2 productivity for the entire US manufacturing sector. We measure energy and CO2 productivity as output per dollar energy input or per ton CO2 emitted. Three findings emerge. First, within narrowly defined industries, heterogeneity in energy and CO2 productivity across plants is enormous. Second, heterogeneity in energy and CO2 productivity exceeds heterogeneity in most other productivity measures, like labor or total factor productivity. Third, heterogeneity in energy and CO2 productivity has important implications for environmental policies targeting industries rather than plants, including technology standards and carbon border adjustments.Citation
Lyubich, Eva, Joseph Shapiro, and Reed Walker. 2018. "Regulating Mismeasured Pollution: Implications of Firm Heterogeneity for Environmental Policy." AEA Papers and Proceedings, 108: 136-42. DOI: 10.1257/pandp.20181089Additional Materials
JEL Classification
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L60 Industry Studies: Manufacturing: General
- Q52 Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
- Q53 Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q54 Climate; Natural Disasters and Their Management; Global Warming
- Q58 Environmental Economics: Government Policy