Can adoption of pollution prevention techniques reduce pollution substitution?

Pollution prevention (P2) has become an integral part of the U.S. environmental policy that emphasizes the benefits of preventing pollution generation at the source over treatment or recycling after the generation of wastes. This study extends the existing literature on the effect of voluntary adoption of P2 in reducing toxic wastes by examining the extent to which it reduces pollution substitution. We use facility panel data from the Toxics Release Inventory from 1991 to 2011 to examine the effect of the adoption of P2 techniques on the ratios of water releases to air releases, amounts of treatment to total releases, and amounts of recycling to total releases while controlling for endogeneity of the adoption of P2 techniques and facility fixed effects. We find that the adoption of P2 techniques reduces toxic air and water releases equally, but it is associated with increases in treated and recycled wastes over total releases to the environment.