Economic Analysis of Environmental Regulations: Lessons from VOC Standards for Paper Coating

Abstract

Economic studies of proposed environmental regulations begin with estimates of compliance actions and their costs. The assumptions about compliance actions can be misleading. In economic studies pertaining to regulations for volatile organic compound emissions by Illinois paper coaters, three sources of shortcomings are particularly evident: 1) failure to appreciate linkages between regulations applying to closely allied industries; 2) emphasis on well-known technologies, despite strong evidence that they will be displaced; and 3) heavy reliance on EPA technical data, whether or not they fairly represent state or local conditions.