Geographic Resolution in Environmental Policy: EPA’s Shift from Regions to Counties Under the Clean Air Act

Prior to 1978 EPA regulated nonattainment with the Clean Air Act using Air Quality Control Regions (AQCRs), switching to counties in 1978. This paper investigates the implications of this change for ambient pollution and manufacturing employment. We find that EPA’s official AQCR nonattainment designation for total suspended particulate matter (TSP) in 1972 had no causal effect on ambient TSP. Nor do we detect robust causal evidence that being in nonattainment in the AQCR regime affected employment in pollution intensive manufacturing industries. In contrast, using an imputed definition of 1972 nonattainment based on county level monitor readings, we find evidence that nonattainment decreased ambient TSP and manufacturing employment. After 1978, when EPA officially adopted county level nonattainment designations, both ambient TSP and manufacturing employment in pollution intensive industries declined. We discuss the implications of these findings for EPA’s decision regarding the geographic level at which to regulate air pollution.