SUBSIDIZED LOAN PROGRAM ECONOMIC ASSESSMENT: A Potential Policy Solution for North Carolina's Dry Cleaning Industry
Abstract
In 1997, the North Carolina (NC) government established the Dry Cleaning Solvent Cleanup
Act (DSCA) to minimize the negative health impacts that result from the use of the
toxic solvent perchloroethylene (or perc) in the dry cleaning industry (DCI). Since
then, the understanding of the long-term risk of DCI perc use to human, environmental
and economic health has evolved. The phase out of DCI perc use in NC dry cleaning
now has demonstrated value.
This study uses discounted cash flow (DCF) analysis to evaluate a subsidized loan
program that would encourage the phase out of the use of perc by NC dry cleaners.
It incorporates two higher economic value gains of a perc phase out into the analysis,
the decrease of real estate and public health costs. In addition, this study takes
an interdisciplinary approach – combining research findings and methods from the fields
of toxicology, law, finance and economics – to provide further recommendations on
how to drive productive DCI regulatory change in North Carolina.
The analysis results support two key findings. First, the net benefit of phasing out
perc equipment is in North Carolina’s economic interest. Second, the net gain of a
phase out is sufficient to finance a program to subsidize dry cleaners to convert
to non-perc alternatives. However, the value of a non-perc dry cleaning machine subsidy
can only be captured if the implementation process and participation rate are designed
and carried out effectively.
Type
Master's projectPermalink
https://hdl.handle.net/10161/5209Citation
Margolis, Jessie (2012). SUBSIDIZED LOAN PROGRAM ECONOMIC ASSESSMENT: A Potential Policy Solution for North
Carolina's Dry Cleaning Industry. Master's project, Duke University. Retrieved from https://hdl.handle.net/10161/5209.Collections
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