TY  - JOUR
AU  - Sigman,Hilary
TI  - Transboundary Spillovers and Decentralization of Environmental Policies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10717
PY  - 2004
Y2  - August 2004
UR  - http://www.nber.org/papers/w10717
L1  - http://www.nber.org/papers/w10717.pdf
N1  - Author contact info:
Hilary Sigman
Department of Economics
Rutgers University
75 Hamilton Street
New Brunswick, NJ  08901-1248
Fax: 732/932-7416
E-Mail: sigman@econ.rutgers.edu
AB  - Most US federal environmental policies allow states to assume responsibility for implementation and enforcement of regulations; states with this responsibility are referred to as "authorized'' or having "primacy.'' Although such decentralization may have benefits, it may also have costs with pollution spillovers across states. This paper estimates these costs empirically by studying the free riding of states authorized under the Clean Water Act. The analysis examines water quality in rivers around the US and includes fixed effects for the location where water quality is monitored to address unobserved geographic heterogeneity. The estimated equations suggest that free riding gives rise to a 4% degradation of water quality downstream of authorized states, with an environmental cost downstream of $17 million annually.
ER  -