Economic Determinants for China's Industrial SO2 Emission: Reduced vs. Structural form and the role of international trade
AbstractIn this paper, basing on panel data on Chinese provincial level from 1991-2000, we test, firstly, the existence of EKC for industrial SO2 emission density. Following, we decompose the economical determinants of this SO2 emission density into: income effect (GDPPC), scale effect (Industrial GDP per km2) and composition effect (industrial capitalistic ratio). And in the third step, we study the direct and indirect role of international trade intensity ((X+M)/GDP). Instead of a supposed EKC, we find ever-increasing trend in industrial SO2 emission density with respect to income growth for most Chinese provinces when the three largest cities (Beijing, Tianjin and Shanghai) directly under central government are taken off from our database. Following, confirming Grossman (1995), we succeed in decomposing industrial SO2 emission density into its three famous economic “effects”. However, different from our expectation, the composition effect, measured by industrial capitalistic ratio K/L in this paper, instead of being a pollution-increasing role as generally accepted idea, turns out to lead industrial SO2 density to reduce as a technology-reinforcing factor. For the role of trade, besides the positive direct impact on industrial SO2 density, we find equally some “pollution haven” evidences. In addition, our results show for most provinces, their comparative advantage stays still in labour-intensive sectors, increase in the capitalistic ratio is proven to be environment-friendly through its technological “pollution-abatement” effect until this ratio reach the level of 83333 yuan/person, which can be considered as the threshold to distinguish capital-intensive sector. Due to these different aspect's effects, corresponding to the conclusion of ACT (1998, 2001), the total effect of trade on industrial SO2 pollution does not turn out to be an important factor for industrial SO2 emission density. Including all these co-related economic determinants into a more general graphical analysis, we find that, for most provinces whose actual income and capitalistic ratio stay still at moderate level, further income growth and capital accumulation are generally environment-friendly factor in openness process. However, the further enlargement of openness degree will result in environment deterioration for the provinces that have relatively low income and too low or too high capitalistic ratio. The necessary policy to reduce this possible deterioration is to adopt besides the open policy, the complementary policies aiming at reinforcing public consciences on environment quality (through income effect) and encouraging R&D activities to increase technological efficiency in pollution abatement.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HAL in its series Working Papers with number halshs-00564688.
Date of creation: 09 Feb 2011
Date of revision:
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00564688/en/
Contact details of provider:
Web page: http://hal.archives-ouvertes.fr/
“pollution haven” hypothesis.; Decomposition; industrial SO2 emission; international trade; EKC; China;
Other versions of this item:
- Jie He, 2006. "Economic Determinants for China’s Industrial SO2 Emission: Reduced vs. Structural form and the role of international trade," Cahiers de recherche 06-27, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.
- Jie HE, 2005. "Economic Determinants for China’s Industrial SO2 Emission: Reduced vs. Structural form and the role of international trade," Working Papers 200505, CERDI.
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-19 (All new papers)
- NEP-CIS-2011-02-19 (Confederation of Independent States)
- NEP-ENE-2011-02-19 (Energy Economics)
- NEP-ENV-2011-02-19 (Environmental Economics)
- NEP-INT-2011-02-19 (International Trade)
- NEP-TRA-2011-02-19 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Selden Thomas M. & Song Daqing, 1995. "Neoclassical Growth, the J Curve for Abatement, and the Inverted U Curve for Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 162-168, September.
- Cole, Matthew A. & Elliott, Robert J. R., 2003. "Determining the trade-environment composition effect: the role of capital, labor and environmental regulations," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 363-383, November.
- Gene M. Grossman & Alan B. Krueger, 1991.
"Environmental Impacts of a North American Free Trade Agreement,"
NBER Working Papers
3914, National Bureau of Economic Research, Inc.
- Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
- Grossman, Gene & Krueger, Alan B, 1992. "Environmental Impacts of a North American Free Trade Agreement," CEPR Discussion Papers 644, C.E.P.R. Discussion Papers.
- Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001.
"Is Free Trade Good for the Environment?,"
American Economic Review,
American Economic Association, vol. 91(4), pages 877-908, September.
- Agras, Jean & Chapman, Duane, 1999. "A dynamic approach to the Environmental Kuznets Curve hypothesis," Ecological Economics, Elsevier, vol. 28(2), pages 267-277, February.
- Suri, Vivek & Chapman, Duane, 1998. "Economic growth, trade and energy: implications for the environmental Kuznets curve," Ecological Economics, Elsevier, vol. 25(2), pages 195-208, May.
- Selden Thomas M. & Song Daqing, 1994. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 147-162, September.
- Hettige, Hemamala & Lucas, Robert E B & Wheeler, David, 1992. "The Toxic Intensity of Industrial Production: Global Patterns, Trends, and Trade Policy," American Economic Review, American Economic Association, vol. 82(2), pages 478-81, May.
- Panayotou, Theodore, 1997. "Demystifying the environmental Kuznets curve: turning a black box into a policy tool," Environment and Development Economics, Cambridge University Press, vol. 2(04), pages 465-484, November.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Brian R. Copeland & M. Scott Taylor, 1997. "A Simple Model of Trade, Capital Mobility, and the Environment," NBER Working Papers 5898, National Bureau of Economic Research, Inc.
- McGuire, Martin C., 1982. "Regulation, factor rewards, and international trade," Journal of Public Economics, Elsevier, vol. 17(3), pages 335-354, April.
- Copeland, Brian R & Taylor, M Scott, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 109(3), pages 755-87, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD).
If references are entirely missing, you can add them using this form.