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Seminar: Do Environmental Regulations Really Increase Resource Productivity?: The Case of Electric Utilities

Date(s): January 20, 2011, 1:00pm

Location: Room 4144 EPA West, 1301 Constitution Ave., NW, Washington, DC

Contact: Carl Pasurka, 202-566-2275

Presenter(s): Eun-Hee Kim (Department of Strategic Management and Public Policy, George Washington University)

Description: This study tests the so-called Porter Hypothesis in the context of climate change and explores a possible mechanism behind the Porter Hypothesis. Using data on electric utility companies around the world and those in the EU member states in particular, the paper examines how ratification of the Kyoto Protocol and the stringency of the European Union Emissions Trading Scheme affected changes in firm-level resource productivity over time, 2000-2007. Contrary to the Porter Hypothesis, the paper finds that the Kyoto Protocol had a negative effect on resource productivity. The stringency of the EU-ETS did not have any impact on resource productivity. Regarding a possible mechanism behind the Porter Hypothesis, the paper suggests that firm heterogeneity might play a role. Firm-specific X-inefficiency had a positive effect, although small in magnitude, on resource productivity.

Seminar Category: Environmental Economics