The Effects of Vintage-DifferentiatedEnvironmental Regulation
DownloadVintage-differentiated regulations (VDRs) are standards that are fixed with respect to thedate of entry of regulated units, with later vintages facing more stringent standards. VDRs playprominent roles under major Federal, state, and local environmental laws. This paper synthesizeswhat is known about the effects of environmental VDRs, and develops lessons for public policy andfor research. Economic theory suggests that such age-discriminatory regulations retard turnover ofthe capital stock, drive up the cost of environmental protection, and can increase pollution levels.Empirical studies validate theoretical predictions that VDRs delay replacement of durable goods,and thereby increase aggregate pollution abatement costs. In some cases, empirical studies alsovalidate the perverse consequence that environmental progress is itself retarded.
