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Enforcement of pollution levies in China

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  • Lin, Liguo

Abstract

This paper investigates how industrial plants react to inspections conducted by environmental authorities under the pollution levy (taxation) regulation in China. Contrary to studies in the United States and Canada (Magat and Viscusi, 1990; Laplante and Rilstone, 1996), and previous studies in China (Dasgupta et al., 2001), we find that inspections increase plants' self-reported pollution by 3.45%. We provide a model to analyze plants' strategic reactions to the pollution levy regulation in China. The model concludes that under the specific regulation, plants' actual pollution might increase with inspections. Our study provides a key policy implication that inspections by environmental authorities in China are effective for verifying plants' self-reported pollution but not for reducing their pollution.

Suggested Citation

  • Lin, Liguo, 2013. "Enforcement of pollution levies in China," Journal of Public Economics, Elsevier, vol. 98(C), pages 32-43.
    • Handle: RePEc:eee:pubeco:v:98:y:2013:i:c:p:32-43
    DOI: 10.1016/j.jpubeco.2012.11.004
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    5. Zhipeng Tang & Wenming Song & Jialing Zou, 2022. "The Early Effect of Black Land Protection Plan in Northeast China on Industrial Pollution Using Synthetic Control Method," Land, MDPI, vol. 11(4), pages 1-15, April.
    6. He, Guojun & Xie, Yang & Zhang, Bing, 2020. "Expressways, GDP, and the environment: The case of China," Journal of Development Economics, Elsevier, vol. 145(C).
    7. Guojun He & Yang Xie & Bing Zhang, 2017. "Balancing Development and the Environment in a Changing World: Expressways, GDP, and Pollution in China," HKUST IEMS Working Paper Series 2017-43, HKUST Institute for Emerging Market Studies, revised Aug 2017.
    8. Ma, Teng & Takeuchi, Kenji, 2020. "Cleaning up the air for the 2008 Beijing Olympic Games: Empirical study on China's thermal power sector," Resource and Energy Economics, Elsevier, vol. 60(C).
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    10. Jingbo Cui & On Kit Tam & Bei Wang & Yan Zhang, 2020. "The environmental effect of trade liberalization: Evidence from China's manufacturing firms," The World Economy, Wiley Blackwell, vol. 43(12), pages 3357-3383, December.
    11. Lidia Vidal-Meliá & Carmen Arguedas & Eva Camacho-Cuena & José Luis Zofío, 2022. "An Experimental Analysis of the Effects of Imperfect Compliance on Technology Adoption," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(3), pages 425-451, March.
    12. Guoyou Qi & Hailiang Zou & Xuemei Xie, 2020. "Governmental inspection and green innovation: Examining the role of environmental capability and institutional development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1774-1785, July.
    13. Calel, Raphael & Dechezlepretre, Antoine & Venmans, Frank, 2023. "Policing carbon markets," LSE Research Online Documents on Economics 120565, London School of Economics and Political Science, LSE Library.
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    15. Iris Claus & Les Oxley & Siqi Zheng & Cong Sun & Ye Qi & Matthew E. Kahn, 2014. "The Evolving Geography Of China'S Industrial Production: Implications For Pollution Dynamics And Urban Quality Of Life," Journal of Economic Surveys, Wiley Blackwell, vol. 28(4), pages 709-724, September.
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    18. Chakraborti, Lopamudra, 2020. "Regulator Reputation Effects in Developing Countries: Evidence from the Toxics Pollution Registry of Mexico," MPRA Paper 104580, University Library of Munich, Germany.
    19. Wang, Chunhua & Wu, JunJie & Zhang, Bing, 2018. "Environmental regulation, emissions and productivity: Evidence from Chinese COD-emitting manufacturers," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 54-73.
    20. Bin He & Mengzhen Qi & Ning Wang & Zhenhua Zhang, 2022. "Avoiding Real Harm but False Good: The Influence Mechanism of Political Relations on the Effectiveness of Environmental Regulation Policies," IJERPH, MDPI, vol. 19(23), pages 1-16, November.
    21. Shenggang Ren & Duojun He & Tao Zhang & Xiaohong Chen, 2019. "Symbolic reactions or substantive pro‐environmental behaviour? An empirical study of corporate environmental performance under the government's environmental subsidy scheme," Business Strategy and the Environment, Wiley Blackwell, vol. 28(6), pages 1148-1165, September.
    22. Tsaur‐Chin Wu & Ching‐Yang Liang & Kun‐Li Lin, 2022. "Environmental effectiveness of tax compliance policy in the presence of labor unions," International Journal of Economic Theory, The International Society for Economic Theory, vol. 18(2), pages 137-153, June.

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    More about this item

    Keywords

    Enforcement; Inspections; Pollution levies; China;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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