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The Political and Legal Causes of Regulatory Delay in the United States: Four Case Studies of Air Pollution Permitting in the US and Germany

Abstract

We compare the process to obtain air pollution emission permits for automobile assembly plants in the U.S. and Germany. The project consists of four case studies in which comparisons are made with respect to the costs of obtaining air pollution permits for assembly plant "paint shops"--the part of the factory where new cars and trucks are painted. The plants are owned by the same company, use nearly identical paint application technologies and paints, and use virtually the same air pollution control technologies. Moreover, both countries are federalist in structure, with the national government setting general standards, and the states issuing and enforcing individual permits. These similarities allow us to compare the permitting processes in U.S. and Germany, and to isolate the salient political and legal differences and economic consequences. In both the United States and Germany, state air pollution agencies implement federal standards that effectively require the assembly plants to install similar pollution abatement technologies to control emissions resulting from increases in production or changes in paint composition. Nevertheless, the two countries' regulatory processes are rather different. Air pollution control laws, regulations, and plant-level permits in the U.S. are somewhat more stringent, detailed, and prescriptive than in Germany. Moreover, U.S. law provides substantially greater opportunity for public participation in agency permitting decisions, and at one U.S. plant, public participation significantly affected the regulatory outcome. For these and other reasons, the permitting processes at the U.S. plants were much slower and more conflictual than at the German plants, resulting in much longer delays in making production changes and installing new pollution controls.

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