National Center for Environmental Economics, US EPA / by Glenn Sheriff, Ann E. Ferris, Ronald J. Shadbegian
Policy makers are keenly interested in environmental regulation’s employment impacts. Empirical research has relied on restrictive assumptions regarding institutional structure and definition of the regulated sector that can lead to mis-characterization of which plants get regulated, when they get regulated, and how stringent their regulations are. We relax these assumptions to develop a nuanced understanding of how the Clean Air Act’s Ozone National Ambient Air Quality Standards affected the U.S. electric power sector in the 1990s. We find that abstracting from regulatory details can lead to underestimation of relative historical local impacts and overestimation of relative projected local impacts of possible future regulation.