Abstract: In the past two decades, rapid population and economic growth on the U.S.–Mexico border has spurred a dramatic increase in electricity demand. In response, American energy multinationals have built power plants just south of the border that export most of their electricity to the United States. This development has stirred considerable controversy because these plants effectively skirt U.S. environmental air pollution regulations in a severely degraded international airshed. Yet to our knowledge, this concern has not been subjected to rigorous scrutiny. This paper uses a suite of air dispersion, health impacts, and valuation models to assess the human health damages in the United States and Mexico caused by air emissions from two power-exporting plants in Mexicali, Baja California. We find that these emissions have limited but nontrivial health impacts, mostly by exacerbating particulate pollution in the United States, and we value these damages at more than half a million dollars per year. These findings demonstrate that power-exporting plants can have cross-border health effects and bolster the case for systematically evaluating their environmental impacts.

Abstract: In the past two decades, rapid population and economic growth on the U.S.–Mexico border has spurred a dramatic increase in electricity demand. In response, American energy multinationals have built power plants just south of the border that export most of their electricity to the United States. This development has stirred considerable controversy because these plants effectively skirt U.S. environmental air pollution regulations in a severely degraded international airshed. Yet to our knowledge, this concern has not been subjected to rigorous scrutiny. This paper uses a suite of air dispersion, health impacts, and valuation models to assess the human health damages in the United States and Mexico caused by air emissions from two power-exporting plants in Mexicali, Baja California. We find that these emissions have limited but nontrivial health impacts, mostly by exacerbating particulate pollution in the United States, and we value these damages at more than half a million dollars per year. These findings demonstrate that power-exporting plants can have cross-border health effects and bolster the case for systematically evaluating their environmental impacts.

Abstract: In the past two decades, rapid population and economic growth on the U.S.–Mexico border has spurred a dramatic increase in electricity demand. In response, American energy multinationals have built power plants just south of the border that sell most of their electricity to the United States. This development has heightened concern about border area’s already-poor air quality because these plants effectively skirt U.S. environmental regulations. Yet to our knowledge, this concern has not been subjected to rigorous scrutiny. This paper uses a suite of air dispersion, health impacts, and valuation models to assess the benefits of offsetting polluting emissions from two power-exporting plants inMexicali, Baja California. We find that these plants have extensive health impacts, including more than 1.9 short-term mortalities and hundreds of respiratory hospital admissions per year, which we value atalmost US$8 million. The vast majority of these health impacts are associated with ozone pollution in the United States caused by one of the two plants’ emissions. These findings bolster the case for changingU.S. law either to require power-exporting plants to reduce or offset their emissions or to provide incentives for them to do so.

Abstract: Because conventional command-and-control environmental regulation often performs poorly in developing countries, policymakers are increasingly experimenting with alternatives, including state-sponsored voluntary regulatory programs that provide incentives, but not mandates, for pollution control. Although the literature on this trend is quite thin, research in industrialized countries suggests that voluntary programs are sometimes ineffective because they mainly attract relatively clean participants seeking to free-ride on unrelated pollution control investments. We use plant-level data on more than 60,000 facilities to identify the drivers of participation in the Clean Industry Program, Mexico’s flagship voluntary regulatory initiative. Our results suggest that the threat of regulatory sanctions drives participation in the program. Therefore, the program does appear to attract relatively dirty firms. We also find that plants that sold their goods in overseas markets and to government suppliers, used imported inputs, were relatively large, and were in certain sectors and states were more likely to participate in the program, all other things equal.

Abstract: Advocates claim that voluntary programs can help shore up poorly performing command-andcontrol environmental regulation in developing countries. Although literature on this issue is quite thin, research on voluntary environmental programs in industrialized countries suggests that they are often ineffective because they mainly attract relatively clean plants free-riding on prior pollution controlinvestments. We use plant-level data on some 59,000 facilities to identify the drivers of participation in the ISO 14001 certification program in Mexico. We find that regulatory fines spur certification: on average, a fine roughly doubles the likelihood of certification for three years. Hence, the program attracts dirty firms and at least has the potential to improve environmental performance. We also find that plants that sold their goods in overseas markets, used imported inputs, were relatively large, and were in certain sectors and states were more likely to be certified.

Abstract: Economic policies that boost the return to mixed agroforesty, thereby creating financial incentives for land managers to favor these systems over less environmentally friendly land uses, could,in theory, have ancillary environmental benefits. This paper analyses primary and secondary data to determine whether a voluntary price support program for Mexican coffee—mostly grown in shadedsystems that supply important ecosystem services—has had such “win-win” benefits by stemming rampant land-use change in the coffee sector. We find that although the program attracted the types ofgrowers associated with land-use change, it attracted only a relatively small number of them, did not target growing areas hardest hit by conversion to other land uses, and provided subsidies that were probably too small to affect land-use decisions. These results raise serious questions about the ability of a mixed agroforestry price support program with a modest price floor to have a significant conservation impact.

Abstract: This paper uses an analytical-simulation model to examine the optimal extent and welfare effects of pricing reforms for passenger transportation in Mexico City. The model incorporates travel by auto, microbus, public bus, and rail, plus externalities from local and global air pollution, traffic congestion, and road accidents. In our benchmark case, the optimal gasoline tax is $2.72 (29.6 pesos) per gallon, or 16 times the current tax. However, a per-mile toll would reduce traffic congestion, the largest externality, more directly, and we put the optimized auto toll at 20.3 cents per mile. Tolls should also be imposed on microbuses even though the welfare gains are relatively modest, as are those from reforming public transit fares.

Abstract: Managed forest ecosystems—agroforestry systems in which crops such as coffee and bananas are planted side-by-side with woody perennials—are being touted as a means of safeguarding forests along with the ecological services they provide. Yet we know little about the determinants of land cover in such systems, information needed to design effective forest conservation policies. This paper presents a spatial regression analysis of land cover in a managed forest ecosystem—a shade coffee region of coastal Mexico. Using high-resolution land cover data derived from aerial photographs along with data on the geophysical and institutional characteristics of the study area, we find that plots in close proximity to urban centers are less likely to be cleared, all other things equal. This result contrasts sharply with the literature on natural forests. In addition, we find that membership in coffee-marketing cooperatives, farm size, and certain soil types are associated with forest cover, while proximity to small town centers is associated with forest clearing.

Abstract: Hamstrung by weak institutions that undermine conventional environmental regulatory tools, policymakers in developing countries are increasingly turning to voluntary approaches. To date, however,there have been few evaluations of these policy experiments. To help fill this gap, we summarize arguments for and against the use of voluntary regulation in developing countries, review the nascentliterature on the topic, and present case studies of agreements negotiated between regulators and leather tanners in an industrial city in Mexico, a national environmental audit program in Mexico, and a national public disclosure program in India. Admittedly few in number, these three case studies nevertheless suggest that although voluntary environmental regulation in developing countries is a risky endeavor, it is by no means doomed to failure. The risks can be minimized by emphasizing the dissemination of information about pollution and pollution abatement options and by avoiding voluntary approaches in certain situations—those where regulatory and nonregulatory pressures for improved environmental performance are weak and where polluters can block quantified targets, individual sanctions for noncompliance, and other widely accepted prerequisites of effective initiatives.

Abstract: More than three-quarters of Mexico’s coffee is grown on small plots shaded by the existingforest. Because they preserve forest cover, shade coffee farms provide vital ecological services includingharboring biodiversity and preventing soil erosion. Unfortunately, tree cover in Mexico’s shade coffeeareas is increasingly being cleared to make way for subsistence agriculture, a direct result of theunprecedented decline of international coffee prices over the past decade. This paper summarizes the keyfindings of a three-year study of deforestation in Oaxaca, one of Mexico’s prime regions for growingshade coffee. First, we find that deforestation during the 1990s was significant. Second, the loss of treecover can likely be slowed by promoting coffee-marketing cooperatives and “green” certification,providing coffee price supports, and specifically targeting areas populated by small, indigenous farmersfor assistance. Finally, to be effective, such policies must be implemented quickly after price shocksoccur.

Abstract: In many developing countries, a host of financial, institutional, and political factors hamstringconventional environmental regulation. Given these constraints, a promising strategy for controllingpollution is to promote the voluntary adoption of clean technologies. Although this strategy has receivedconsiderable attention in policy circles, empirical research on the adoption of clean technologies indeveloping countries is limited. This paper presents historical background and original survey data on theadoption of five clean tanning technologies by a sample of 137 leather tanneries in León, Guanajuato,Mexico, a city where tanneries have serious environmental impacts and conventional environmentalregulation has repeatedly failed to mitigate the problem. The analysis suggest that rather than top-downpublic-sector pressure and technical assistance, the key factor driving the adoption of clean tanningtechnologies in León is the bottom-up dissemination of information about the cost and quality benefits ofthe technologies.

Abstract: The city of León, Guanajuato, is Mexico’s leather goods capital and a notorious environmentalhotspot. Over the past two decades, four high-profile voluntary agreements aimed at controlling pollutionfrom León’s tanneries have yielded few concrete results. To understand why, this paper reconstructs thehistory of these initiatives, along with that of local environmental regulatory capacity. Juxtaposing thesetwo timelines suggests that the voluntary pollution control agreements were both motivated by—andundermined by—gaps in the legal, institutional, physical, and civic infrastructures needed to makeregulation effective. Our analysis offers a concrete definition of environmental regulatory capacity,provides insights into how it evolves, and demonstrates its importance. Moreover, it sheds light on thequestion of whether voluntary environmental agreements—an increasingly popular regulatory tool—arelikely to be effective in developing countries.

Abstract: Managed forest ecosystems—agroforestry systems in which crops such as coffee and bananas are planted side-by-side with woody perennials—are being touted as a means of safeguarding forests along with the ecological services they provide. Yet we know little about the determinants of land cover in such systems, information needed to design effective forest conservation policies. This paper presents a spatial regression analysis of land cover in a managed forest ecosystem—a shade coffee region of coastal Mexico. Using high-resolution land cover data derived from aerial photographs along with data on the geophysical and institutional characteristics of the study area, we find that plots in close proximity to urban centers are less likely to be cleared, all other things equal. This result contrasts sharply with the literature on natural forests. In addition, we find that membership in coffee-marketing cooperatives, farm size, and certain soil types are associated with forest cover, while proximity to small town centers is associated with forest clearing.

Abstract: In many cities in developing countries, clusters of small and medium enterprises create severe pollution problems. Because conventional regulatory approaches are typically ineffective in such situations, policy responses have increasingly focused on promoting voluntary clean technological change. Yet the data and analysis needed to guide such efforts are scarce. This paper uses original firmlevel survey data on a cluster of small- and medium-scale leather tanneries in León, Guanajuato— Mexico’s leather capital—to econometrically identify the factors that drive the adoption of three clean tanning technologies. Using a multivariate probit model to estimate a system of seemingly unrelated regressions, we find—in contrast to conventional wisdom—that neither firm size nor regulatory pressure is correlated with adoption. Rather, the drivers of adoption are the firm’s human capital and stock of technical information, the same factors that explain conventional productivity-enhancing technological change. We also find that private-sector trade associations and input suppliers are important sources of technical information about clean technologies.

Abstract: Ciudad Juárez, Chihuahua, is home to the U.S.–Mexico border’s largest maquiladora labor force,and also its worst air pollution. We marshal two types of evidence to examine the link betweenmaquiladoras and air pollution in Ciudad Juárez, and in its sister city, El Paso, Texas. First, we use apublicly available sector-level emissions inventory for Ciudad Juárez to determine the importance of allindustrial facilities (including maquiladoras) as a source of air pollution. Second, we use original plantleveldata from two sample maquiladoras to better understand the impacts of maquiladora air pollution onhuman health. We use a series of computational models to estimate health damages attributable to airpollution from these plants, we compare these damages to estimates of damages from non-maquiladoraindustrial polluters, and we use regression analysis to determine whether the poor sufferdisproportionately from maquiladora air pollution. We find that air pollution from maquiladoras hasserious consequences for human health, including respiratory disease and premature mortality. However,maquiladoras are clearly not the leading cause of air pollution in Ciudad Juárez and El Paso. Moreover,most maquiladoras are probably less important sources of dangerous air pollution than at least onenotoriously polluting Mexican-owned industry. Finally, we find no evidence to suggest that maquiladoraair pollution affects the poor disproportionately.

Abstract: In developing countries, urban clusters of manufacturers which are "informal"—small-scale, unlicensed and virtually unregulated—can have severe environmental impacts. Yet pollution control efforts have traditionally focused on large industrial sources, in part because the problem is not well-understood. This paper presents a benefit-cost analysis of four practical strategies for reducing emissions from traditional brick kilns in Ciudad Juárez, Mexico. To our knowledge, it is the first such analysis of informal sources. We find very significant net benefits for three of the four control strategies. These results suggest that informal polluters should be a high priority for environmental regulators.