Direct regulation is an efficient approach to industrial environmental improvement: empirical evidence and perceptions from chemical manufacturers in Ireland and Italy

Industrial production is a major source of global pollution, and it is widely recognised that regulation is required to reduce this pollution for the benefit of society. However, there is considerable debate about the most effective approach to environmental regulation with respect to both environmental and competitive performance. This paper integrates complementary empirical evidence from two entirely separate projects with different approaches (scientific and econometric), from different countries (Ireland and Italy), in order to assess the effectiveness and efficiency of direct environmental regulation in practice. Quantitative pollution avoidance and compliance cost data from Ireland’s pharmaceutical-manufacturing sector were combined with questionnaire responses from 20 Irish pharmaceutical manufacturers and 25 Italian manufacturers of chemicals for building products. We conclude that direct command-and-control regulation is a highly effective approach, and that the efficiency of such regulation is often underestimated.