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Working Paper No. 11-01

Identifying Spillover Effects From Enforcement of the National Ambient Air Quality Standards
Matthew H. Benton
March 2011


In this paper, I examine the effect of county-level air quality regulatory status on polluting behavior across counties. Ozone is regulated subject to the National Ambient Air Quality Standards (NAAQS) of the Clean Air Act. When a county is out of compliance (or out of attainment) for the ozone standard, the state implements a strict plan for reducing the concentrations of precursors to ozone which are volatile organic compounds (VOCs) and nitrogen oxides (NOx). I use county-level attainment status for 1-hour ozone as a proxy for air quality regulatory regime. Regulation of ozone creates a tighter regulatory climate that could spill over and lead to reduced emissions of a large range of pollutants (both regulated and unregulated), primarily those tracked by the EPA's Toxics Release Inventory. The results provide support for the existence of spillovers as evidenced by the reduction of non-VOC emissions associated with nonattainment status of 1-hour ozone.

JEL classification: Q53
Keywords: Toxics Release Inventory; Nonattainment; Spillovers; Regulation; Pollution