Have U.S. environmental policies been effective in the reduction of U.S. emissions? A new approach using fractional integration

This paper deals with the analysis of the global and per capita NOx and VOC emissions in the U.S. and the evaluation of the effectiveness of a number of environmental policies conducted by the government during the last 50 years. For this purpose we have employed fractional integration techniques, which are more flexible than other standard approaches based on the dichotomy between stationary I(0) and nonstationary I(1) behavior. Using the I(d) class of models, our results indicate first that the two NOx series display orders of integration substantially higher than 1, and though the VOC series display smaller orders, the unit root hypothesis cannot be rejected, indicating lack of mean reversion in the four series examined. Including dummy variables for each of the breaks referring to the environmental policies, the results show that the five policies investigated (at 1965, 1967, 1970, 1977 and 1990) were effective in reducing the number of emissions, being particularly important the one that was adopted in 1970.