Toxic release inventories and green consumerism: empirical evidence from Canada

Do firms abate pollution in response to actual or anticipated green consumerism? Lacking direct observational data on the extent of green consumerism, we construct an indirect method to elicit its effect on pollution abatement. If environmentally motivated consumers target companies rather than particular facilities of a multi-product firm, green consumerism can be identified through intra-firm inter-plant spillover effects in pollution abatement. We test the prediction that 'environmentally-leveraged' firms with consumer market exposure experience larger emission reductions. We use 1993-99 panel data from Canada's National Pollutant Release Inventory (NPRI), with pollutants adjusted for toxicity. Our empirical results find statistically significant evidence of green consumerism, but its economic magnitude is very small.