Publication Type

Report

Version

publishedVersion

Publication Date

9-2025

Abstract

This paper analyzes the impacts of U.S. environmental regulations on industry, focusing on command-and-control environmental regulations (CCER) and market-based environmental regulations (MBER). Drawing on empirical data from the Environmental Protection Agency (EPA) spanning over four decades, we examine key legislation such as the Clean Water Act (CWA), Clean Air Act (CAA), and the Resource Conservation and Recovery Act (RCRA), while also discussing more recent frameworks like the Inflation Reduction Act (IRA). Our findings suggest that although penalties under CCER contribute to immediate compliance, they often fail to elicit long-term changes in corporate behavior. In contrast, MBER, exemplified by the IRA, encourages investments in green technologies and promotes a shift toward sustainable practices. Through a comprehensive analysis of case studies, including Volkswagen’s violations of the Clean Air Act and BP’s breach of the Clean Water Act, this study evaluates how regulatory penalties incentivize firms to adopt greener practices, reduce environmental harm, and foster a stronger culture of compliance within industries. Ultimately, the paper advocates for a multifaceted regulatory approach that balances corporate responsibility, cost-efficiency, and environmental protection.

Keywords

environmental regulation, Clean Air Act, Clean Water Act, Inflation Reduction Act, EPA, sustainability, corporate responsibility, market-based regulation, compliance behavior, green technology

Discipline

Environmental Studies | Health Economics

First Page

1

Last Page

19

Publisher

Sim Kee Boon Institute for Financial Economics

City or Country

Singapore

Embargo Period

10-15-2025

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