Donna Ramirez Harrington

Striving to be green: the adoption of total quality environmental management

Many firms are undertaking environment-friendly organizational change by applying the philosophy of total quality management with its emphasis on reducing waste and increasing efficiency. Their objective is to improve their management of pollution and increase customer satisfaction. This article investigates the factors that lead to total quality environmental management (TQEM) by large firms. We find that internal considerations stemming from a firms technical capability, size (absolute and relative to competing firms), extent of operations and volume of past emissions are strongly associated with the TQEM adoption decision. The first four factors are proxies for the firms costs and capabilities of adopting TQEM while the fifth factor is related to the benefits from increasing efficiency and waste reduction, and thus proxies for internally generated demand for TQEM. The desire to improve a firms image with customers, earning good-will with regulators and the anticipation of future regulations do not appear to be associated with the adoption of TQEM. Thus, this articles main conclusion is that the adoption of TQEM is associated mostly with internal factors and motives.

Oligopolies with (somewhat) environmentally conscious consumers: : Market equilibrium and regulatory intervention

We consider a horizontally differentiated duopoly where consumers care about the products “greenness.” Firms can be asymmetric: they may differ in the products intrinsic value and may also differ in their chosen level of greenness. We examine the choice of greenness and the implications of various policy interventions. We show that (i) the choices of product greenness are strategic substitutes, (ii) the high‐intrinsic quality firm produces the greener product, (iii) the low‐quality firms greenness may increase with the cost of its provision or decrease with consumer willingness to pay for it, (iv) a minimum quality standard (MQS) leads the greener firm to lower its environmental quality and can even reduce average quality, (v) greenness is underprovided even if consumers fully internalize the externality, and (v) an MQS can reduce welfare if the greenness of the high‐quality firm exceeds the MQS, even when environmental quality is underprovided. The effects of policy interventions on profits differ qualitatively across polices and firms: A firm that lobbies for one type of intervention may lobby against another similar one, and a firm may lobby for an intervention while its competitor may lobby against it. A subsidy for the development costs of a green product can financially hurt both firms.

Does Pollution Prevention Reduce Toxic Releases? A Dynamic Panel Data Model

We investigate the effectiveness of voluntary pollution prevention activities in reducing toxic releases from facilities that reported to the U.S. Environmental Protection Agency’s Toxics Release Inventory from 1991–2001, using generalized method of moments dynamic panel data models that recognize the potential endogeneity of the pollution prevention adoption decision on toxic releases. We find that pollution prevention adoption had a negative impact on toxic releases. The estimated coefficients suggest that the effect of pollution prevention adoption is substantial, but short-lived, dissipating within 4 to 5 years. However, a continual adoption of pollution prevention techniques leads to lower steady-state releases, with estimated reductions between 35% and 50%.

EFFECTIVENESS OF STATE POLLUTION PREVENTION PROGRAMS AND POLICIES

States are using regulatory‐, information‐, and management‐based policies to encourage the adoption of pollution prevention (P2) and reduce pollution. Using a sample of facilities of S&P 500 firms which report to the Toxic Releases Inventory from 1991 to 2001, this study employs dynamic panel data models to examine the effectiveness of state legislations and policies in increasing P2 and reducing toxic releases. I find that toxic waste legislations are effective in reducing toxic releases and in promoting P2, but the effect of policy instruments differ. Facilities in states with reporting requirement and mandatory planning adopt more P2 even in states that do not emphasize toxic waste reduction. The effectiveness of reporting is stronger among facilities with good environmental performance, while the potency of mandatory planning is greater among facilities with past P2 experience. In contrast, numerical goals reduce toxic pollution levels only among those which have been subjected to high levels of enforcement action. These suggest that reporting requirement and mandatory planning may be promoting the P2 practices which can improve public image and which benefit from enhanced technical know‐how, but they are not causing meaningful pollution reductions, implying that the existing policies must be complemented by other approaches to achieve higher reductions in toxic pollution levels.

Green management and the nature of pollution prevention innovation

Management systems have a strong impact on the level of innovation and on production operations. Understanding this impact sheds light on how firms function. This article examines the relationship between a firm’s approach to environmental management and the nature of the pollution prevention activities or practices that it undertakes. We differentiate pollution prevention activities according to (i) four functional characteristics and (ii) visibility to consumers. We find that the application of the total quality management (TQM) approaches on pollution prevention has a stronger effect for practices that involve procedural changes or are of a customized nature. These are indeed the type of practices where one would expect TQM to have a disproportionate impact in decision-making effectiveness. There seems to be no corresponding effect on the adoption of practices that are visible to consumers. Our results corroborate the notion that a well-designed management system can help stimulate innovation, but only for specific types. They also help identify the types of firms that are more likely to benefit from adoption of TQM principles.

The role of environmental management systems in the Canadian Voluntary Climate and Challenge Registry

This study evaluates the Canadian Voluntary Climate and Challenge Registry (VCR), an important policy in Canadas approach to climate change during the 1990s. First, we relate the set of practices prescribed under the VCR to the well-established Plan-Do-Check-Act framework of environmental management systems (EMSs). We then examine VCR adoption and find that firms with past experience with management systems and firms in provinces with different legal, economic and institutional factors were more likely to adopt VCR. We do not find, however, EMS adopters under the VCR had significantly different GHG releases than non-adopters in the immediate years after the VCR programme ended.