Panel Paper: Information Disclosure and Regulatory Activities: Impacts of the Toxics Release Inventory on the Implementation of the Clean Air Act

Thursday, November 7, 2019
Plaza Building: Lobby Level, Director's Row E (Sheraton Denver Downtown)

*Names in bold indicate Presenter

Zhengyan Li, Indiana University

This paper examines the impacts of mandatory environmental information disclosure policy on the implementation of traditional environmental regulations in the context of the Toxics Release Inventory (TRI), which is the major environmental information disclosure program in the United States, and the Clean Air Act (CAA). Using quasi-experimental variation from TRI’s size-based reporting criteria and its expansion of industry coverage in 1998, I find that regulators significantly reduce the number of regulatory activities on facilities that disclose information in the TRI. Regulatory activities, however, do not seem to react to year-over-year change of disclosed TRI information. The results suggest strong intercorrelations between different forms of environmental policy. Information disclosure policy can complement the implementation of traditional environmental regulations as it provides new information for regulatory decision making and leverages actions from other information users to motivate improvement of environmental performance. At the same time, regulators’ reactions to information can serve as a mechanism for information disclosure policy to achieve its regulatory goals.