Gone with the Wind: Federalism and the Strategic Location of Air Polluters

In the following blog post, the authors summarize the forthcoming American Journal of Political Science article titled “Gone with the Wind: Federalism and the Strategic Location of Air Polluters”:

States have strong incentives to encourage major air polluters to locate near their downwind borders. This allows them to reap the benefits of economic development while making their neighbors shoulder the resulting environmental and health costs. Although there are provisions in the U.S. Clean Air Act designed to mitigate interstate air pollution, they have historically been ineffective. And, there is some evidence that air pollution levels are heightened near downwind state borders. However, prior research has produced little evidence that this is the result of government behavior, such as weaker enforcement of environmental laws.

The solution to this paradox may lie in industrial location itself.  We argue that both state governments and firms have incentives to strategically locate polluting facilities near a state’s downwind borders.  We test this idea with a method that is novel to political science—point pattern analysis. This technique is common in fields like epidemiology, which models where disease cases emerge relative to the broader population at risk. We use the method to analyze where major air polluters emerge in latitude and longitude in the continental 48 states. We compare air polluters to a control group of other industrial facilities: large quantity generators of hazardous waste. Hazardous waste polluters are a good comparison group because they have similar locational needs as air polluters, but the wind cannot carry away the pollution they produce. Hence, a key reason we might observe any difference in the location of these sites is because of attempts to export air pollution to downwind neighbors. As an illustration of our data, the above figure shows air polluters and hazardous waste polluters in the state of Georgia.

We find that major air polluters are significantly more likely to be located near a state’s downwind border than hazardous waste generators.  Our baseline model suggests that moving from a site on a state’s downwind border to the site that is farthest upwind diminishes the odds of a major air polluter relative to a hazardous waste generator by a substantial 22.4%.  This effect is even stronger for facilities that produce highly toxic air emissions.

Our results also indicate that the pattern of industrial location varies systematically across states.  States with stronger environmental programs, for instance, evidence weaker propensity to have air polluting firms locate near downwind borders, while states that make greater use of “smokestack chasing” economic development incentives show the opposite configuration.  This suggests that air polluter location is responsive to public policy.

About the Authors: This author summary was written by Jamie Monogan of University of Georgia, David Konisky of Indiana University, and Neal Woods of University of South Carolina. Their article “Gone with the Wind: Federalism and the Strategic Location of Air Polluters” will be published in a forthcoming issue of the American Journal of Political Science and is currently available for Early View.