Hilary Sigman

International Spillovers and Water Quality in Rivers: Do Countries Free Ride?

Transboundary spillovers may degrade environmental quality if countries free ride. This paper examines the extent of such degradation in water quality in international rivers. Using data from river monitoring stations in the UNs Global Emissions Monitoring System (GEMS), it compares pollution levels in international and domestic rivers. The results suggest that free riding may substantially increase pollution in international rivers, but the estimates are sensitive to the inclusion of country effects.

A Comparison of Public Policies for Lead Recycling

Policies that encourage recycling may be used to reduce environmental costs from waste disposal because direct restrictions on disposal are difficult to enforce. Four recycling policies have been advanced: (i) taxes on the use of virgin materials, (ii) deposit/refund programs, (iii) subsidies to recycled material production, and (iv) recycled content standards. In this article, I analyze the structure of these policies and their cost-effectiveness in achieving reductions in disposal. I then examine the policies in the empirical context of the recycling of lead from automobile batteries. In order to calculate the effects of recycling programs, I estimate the elasticities for primary and secondary lead supply and demand. My results suggest that price-based policy mechanisms can be successful in increasing lead recovery and that the difference in efficiency between the four approaches is similar.

The Incidence of Pollution Control Policies

This paper reviews theoretical and empirical literature on the household distribution of the costs and benefits of pollution control policies, and ways of integrating distributional issues into environmental cost/benefit analysis. Most studies find that policy costs fall disproportionately on poorer groups, though this is less pronounced when lifetime income is used, and policies affect prices of inputs used pervasively across the economy. The policy instrument itself is also critical; freely allocated emission permits may hurt the poor the most, as they transfer income to shareholders via scarcity rents created by higher prices, while emissions taxes offer opportunities for progressive revenue recycling. And although low-income households appear to bear a disproportionate share of environmental risks, policies that reduce risks are not always progressive, for example, they may alter property values in ways that benefit the wealthy. The review concludes by noting a number of areas where future research is badly needed.

Midnight Dumping: Public Policies and Illegal Disposal of Used Oil

Many public policies for hazardous waste raise the costs of legal disposal. Concerned about substitution of illegal disposal, economists have instead recommended policies that reward desirable waste management alternatives. This article studies the empirical determinants of dumping as reported to the U.S. Emergency Response Notification Systems (ERNS). It analyzes the frequency of used oil dumping using count-data models. The results suggest that dumping is sensitive to the cost of legal waste management options, including disposal and reuse, and to the threat of enforcement. In particular, state policies that restrict legal disposal cause substantial substitution of illegal dumping.

Environmental Liability and Redevelopment of Old Industrial Land

Many communities are concerned about the reuse of potentially contaminated land (brownfields) and believe that environmental liability is a hindrance to redevelopment. However, with land price adjustments, liability might not impede the reuse of this land. This article studies state liability rules—specifically, strict liability and joint and several liability—that affect the level and distribution of expected costs of private cleanup. It explores the effects of this variation on industrial land prices and vacancy rates and on reported brownfields in a panel of cities across the United States. In the estimated equations, joint and several liability reduces land prices and increases vacancy rates in central cities. The results suggest that liability is at least partly capitalized but does still deter redevelopment.

Decentralization and Environmental Quality: An International Analysis of Water Pollution Levels and Variation

This paper explores the empirical effects of decentralization on environmental quality by studying water pollution in rivers around the world. It examines the level of pollution and variation in pollution across jurisdictions within a country, for both a local and a regional pollutant. Federal countries exhibit greater interjurisdictional variation in pollution, supporting the traditional view that decentralization allows policies more tailored to local conditions. The analysis does not point to a “race to the bottom” in pollution levels. (JEL H73, Q53)

The Effect of Allowing Pollution Offsets with Imperfect Enforcement

Public policies for pollution control, including climate change policies, sometimes allow polluters in one sector subject to an emissions cap to offset excessive emissions in that sector with pollution abatement in another sector. The government may often find it more costly to verify offset claims than to verify compliance with emissions caps. Concerns about such difficulties in enforcement may lead regulators to restrict the use of offsets. In this paper, we demonstrate that allowing offsets may increase pollution abatement and reduce illegal pollution, even if the government has a fixed enforcement budget. We explore the circumstances that may make allowing pollution offsets an attractive option when enforcement is costly.

Taxing Hazardous Waste: The U.S. Experience

Many states in the US impose taxes on hazardous waste. This paper conducts an empirical evaluation of the determinants of these taxes and reviews earlier research on their effects on hazardous waste. Earlier studies have shown that the taxes affect waste management, but my results and other evidence suggest that the tax-induced changes may not have improved welfare.

Implications of Globalization and Trade for Water Quality in Transboundary Rivers

Increases in international trade have a variety of effects on the environment through the location, scale, and techniques of production. International trade may also have special effects on transboundary resources, such as international rivers as trade provides greater opportunities for policy coordination between trading partners who share a resource. This chapter discusses several mechanisms by which trade may facilitate coordination: trade may provide opportunities for linkage between environmental and trade concessions, facilitate implicit side payments, grant countries direct leverage over other countries’ production, and instill a perception of shared goals between countries. An empirical section reports a test of the effects of globalization (interpreted in the regression equations as overall trade) and trade specifically between countries sharing a natural resource. The United Nation’s Global Environmental Monitoring System (GEMS) provides data on water quality at river monitoring stations around the world. We have coded these stations to indicate whether the rivers cross international borders, and if so, which countries share the river. We then merged these data with information on bilateral trade between upstream and downstream countries and characteristics of these countries such as their income levels and trade openness. The results suggest that water pollution is lower in rivers shared between countries with more trade; supporting the hypothesis that trade promotes coordination of environmental policies.