Does Disclosure Reduce Pollution? Evidence from India's Green Rating Project

Abstract

Public disclosure programs that collect and disseminate information about firms' environmental performance are increasingly popular in both developed and developing countries. Yet little is known about whether they actually improve environmental performance, particularly in the latter setting. We use detailed plant-level survey data to evaluate the impact of India's Green Rating Project (GRP) on the environmental performance of the country's largest pulp and paper plants. We find that the GRP drove significant reductions in pollution loadings among dirty plants but not among cleaner ones. This result comports with statistical and anecdotal evaluations of similar disclosure programs. We also find that plants located in wealthier communities were more responsive to GRP ratings, as were single-plant firms.

Keywords: public disclosure, pollution control, India, pulp and paper

JEL Classification: Q53, Q56, Q58