Productivity and the California Global Warming Solutions Act: An Examination of Cost of Compliance Utilizing Plant Level Data in the Portland Cement and Manufacturing Industry

This dissertation examined the effect of California environmental regulation, AB32 on the Portland Cement Mining and Manufacturing industry which was directly targeted by the legislation. The researcher examined the effect of productivity on the Portland Cement industry operating within California by comparing changes specific labor and fuel use productivity measures to changes in the same measures for organizations operating outside of California. These differences were examined using an independent sample t-test to determine if any changes were statistically significant. The results showed statistically significant increases in productivity for direct labor, total employee labor, and combustible fuel use when analyzed to the p = .05 level of significance. The results of this dissertation suggest that Porter’s hypothesis that environmental regulations can increase operational efficiency for organizations could be true. While the results do seem promising for those who advocate for stricter environmental regulation, the limitations of the study, specifically the infancy of the data set, and the lack of specific financial measures should also be considered. Regardless of the limitations, the results of this research project are useful to business leaders, accountants, and legislatures who are dealing with possible incoming regulations or trying to write those regulations