The US Environmental Protection Agency established standards limiting air toxics emissions from industrial plants under the 1990 Clean Air Act Amendments. This paper analyzes the effects of the rules for five industries: petroleum refining, pharmaceuticals, printing and publishing, pulp and paper, and wood furniture, finding mixed results, and make recommendations for improving ex ante analysis of such regulations.
Under the 1990 Clean Air Act Amendments, the US Environmental Protection Agency (EPA) was required to establish standards limiting air toxics emissions from industrial plants. This paper examines the effect of five of the largest cost rules issued by EPA in the initial round of air toxics rulemaking over the 1995 to 2000 period. Our estimates suggest that plants in the printing and publishing and pulp and paper industries realized important reductions in their air toxics emissions in the period between publication of the final rule and the effective date for compliance with the rule—although the reduction in air toxics emissions by pulp and paper mills falls short of EPA’s ex ante projections. However, our estimates suggest that plants in the other three industries—petroleum refining, pharmaceutical, and wood furniture—achieved little or no additional reduction in air toxics emissions over the compliance period in response to EPA’s air toxics rules. Finally, the paper explores steps that EPA should take in setting up future retrospective analyses.