Environmental Inspections and Emissions of the Pulp and Paper Industry in Quebec

Although it has long been recognized that monitoring and enforcement problems are an important pitfall of environmental regulation, little empirical work has been done on the impact of current monitoring strategies on pollution emissions. The purpose of this study is to measure the impact of inspections on the self-reported emissions levels of plants in the pulp and paper industry in Québec. It extends in numerous ways the empirical framework developed by Magat and Viscusi (J. Law. Econom.33, 331–360 (1990)), who analyzed the impact of inspections in the American pulp and paper industry. In particular, our results suggest that both inspections and thethreatof an inspection have a strong negative impact on pollution emissions. Furthermore, we find that inspections also induce more frequent self-reporting from the industry