Association for Public Policy Analysis & Management

There are a variety of policy tools available to implement initiatives aimed at environmental protection and sustainability. Policy tool choice has been well studied from theoretic economic perspectives as well as empirically examined at state and federal levels. However, environmental initiatives adopted and implemented by cities have received significantly less attention, largely because of the lack of comparable large-n data on that exists on local environmental and sustainability policy. Utilizing new data, this study examines the factors that influence cities’ choice of environmental policy tools and focuses on the impact of regional competition on the choice between regulations and incentives to pursue sustainability aims.

Compared to federal and state governments, local governments tend to utilize policy tools that are relatively less coercive.  That is, instead of relying on regulations or mandates, local governments more often employ incentives and information-based tools to encourage residents and entities operating within their jurisdictions to act in an environmentally beneficial manner. Local governments’ general reluctance to pursue regulatory policies is often attributed to the high competitive pressures that exist between cities as a result of the relative ease with which residents and business can move between them, particularly in fragmented metropolitan areas. The dynamic, famously captured by Tiebout with the notion that people “can vote with their feet” and select to locate in jurisdictions whose policy and services bundle best meets their preferences, motivates cities to vie for desirable residents. The “most attractive” bundles have traditionally been characterized by low taxes and lax regulatory standards. However, quality of life amenities can counter the desire for low tax/low regulation bundles, as seen most notably with school districts. Environmental sustainability is increasingly seen as a good worthy of local financial and political investment. Previous research has revealed that a significant portion of cities actively pursuing sustainability policies are at least partially motivated by obtaining a “green reputation” which can help them attract mobile residents seeking to live in a place that offers a high quality of life. This suggests that stronger environmental policies may be used as a competitive mechanism in some locations.

This paper empirically examines these opposing hypotheses using new data from a national survey administered in 2015-2016 to all cities in the US with populations over 20,000. Sequential logit models are used to assess factors that influence the adoption of environmental regulations – as opposed to only incentives or nothing at all – for five specific local environmental objectives: water conservation, greenspace preservation, mixed use development, brownfield site repurposing, and reducing plastic bag use. Independent variables of key interest indicate regional competition and models control for governmental capacity, political leaning, and community demographics. Preliminary results show that competition tends to lead to a reduced use of regulations, but that this varies by policy type; the choice of policy tools to promote water conservation and reduce plastic bag use appear subject to a different dynamic.