Are Hazardous Substance Rankings Effective? An Empirical Investigation of Changing Assessments of the Relative Hazards of Chemicals and Voluntary Emissions Reductions


Wayne Fu
Wayne Fu
  • Speaker
Scheller College of Business, Georgia Tech

Event Information

Type
Research Seminar
Programme
Logistics
Date
Mon. 30 Jan. 2017
Contact
Niels Agatz
Time
12:00 - 13:00
Location
T09-67


Abstract

The public dissemination of information about the hazards of chemicals can be expected to lead to pressure on facilities or firms to undertake voluntary actions. Although governmental organizations, in particular the US Agency for Toxic Substances and Disease Registry, provide extensive public information about the potential hazards of chemicals, limited empirical research has been devoted to examining: (1) the link between such information and the voluntary environmental efforts of facilities that use these chemicals, and (2) the implications of the operational characteristics of the facilities on the extent and nature of these efforts. We add to the understanding of these relationships by investigating voluntary reductions in chemical emissions by facilities, including the use of source reduction and end-of-pipe treatment, in relation to changes in the relative assessed hazard levels of the chemicals, as evidenced in the periodically-updated public information. We also examine the moderating effects of operational leanness – an attribute that prior studies have found to be associated with better environmental performance – in the dynamic setting wherein the relative assessed hazard levels of chemicals change over time. To test our hypotheses, we draw secondary data from four sources—the biennial Substance Priority List from the US Agency for Toxic Substances and Disease Registry, the Toxics Release Inventory from the US EPA, the US National Establishment Time-Series, and Compustat. Employing a panel model with facility-chemical- and time-fixed effects and controlling for various facility and industry factors, we find that public information dissemination on the relative hazards of chemicals is effective, as indicated by the significant association between increases in the relative assessed hazard levels of chemicals and greater subsequent emissions reductions, as well as the increased use of source reduction. As for the implications of operational leanness, we find that its overall effect is positive, i.e., leaner facilities outperform less lean facilities with regard to emissions reductions. However, we also find that when the relative assessed hazard level increases, less lean facilities increase their emissions reductions more than leaner facilities.

Niels Agatz
  • Coordinator