The Effects of Environmental Regulation On Technology Diffusion: The Case of Chlorine Manufacturing

We use a hazard model to estimate the effect of environmental regulation on the diffusion of membrane cell production technology in the chlorine manufacturing industry. We estimate the effect of regulation on both the adoption of the membrane technology at existing plants and on the exit of existing...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Snyder, Lori D, Miller, Nolan, Stavins, Robert N
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2003
Subjects
Chemical industry
Chlorine
Environmental regulations
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Summary:We use a hazard model to estimate the effect of environmental regulation on the diffusion of membrane cell production technology in the chlorine manufacturing industry. We estimate the effect of regulation on both the adoption of the membrane technology at existing plants and on the exit of existing plants using older technologies. We find that environmental regulation did affect the diffusion of the cleaner technology in the chlorine industry. However, it did so not by encouraging the adoption of membrane cells by existing facilities, but by reducing the demand for chlorine and hence encouraging the shutdown of facilities using the environmentally inferior options.