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Why paper mills clean up : determinants of pollution abatement in four Asian countries

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  • Hartman, Raymond S.
  • Huq, Mainul
  • Wheeler, David
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    Abstract

    The authors find strong evidence that despite weak or nonexistent formal regulation and enforcement of environmental standards, many plants in South and Southeast Asia are clean. At the same time, many plants are among the world's worst polluters. To account for the extreme variation among plants, the authors review evidence from a survey of pollution abatement by 26 pulp and paper plants in four countries: Bangladesh, India, Indonesia, and Thailand. They incorporate 3 sets of factors affecting pollution intensity: plant characteristics, economic considerations, and external pressure from the government and private stakeholders. They find that the level of pollution abatement is positively associated with scale and competitiveness, negatively associated with public ownership, and unaffected by foreign links (in ownership or financing). Informal regulation, or community pressure on plants works to abate pollution, with high income being a powerful predictor of effectiveness. Privatization, to the extent that it increases plant efficiency, can significantly improve environmental performance. To prevent environmental injustice in poor or marginalized communities, the authors conclude, governments may want to consider strategies for improving their participation, and may want to target regulation to address pollution problems among them.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1710.

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    Date of creation: 31 Jan 1997
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    Handle: RePEc:wbk:wbrwps:1710

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    Keywords: Environmental Economics&Policies; Water and Industry; Water Conservation; Pollution Management&Control; Sanitation and Sewerage; Environmental Economics&Policies; Water and Industry; Pollution Management&Control; Sanitation and Sewerage; TF030632-DANISH CTF - FY05 (DAC PART COUNTRIES GNP PER CAPITA BELOW USD 2; 500/AL;

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    Cited by:
    1. Alexander & Chris William Sanchirico & John Lee & Daniel Prager, 2002. "Big field, small potatoes: An empirical assessment of EPA's self-audit policy," Discussion Papers, Columbia University, Department of Economics 0102-55, Columbia University, Department of Economics.
    2. Talukdar, Debabrata & Meisner, Craig M., 2001. "Does the Private Sector Help or Hurt the Environment? Evidence from Carbon Dioxide Pollution in Developing Countries," World Development, Elsevier, Elsevier, vol. 29(5), pages 827-840, May.
    3. Hettige, Hemamala & Mani, Muthukumara & Wheeler, David, 1998. "Industrial pollution in economic development: Kuznets revisited," Policy Research Working Paper Series 1876, The World Bank.
    4. Matthew A Cole & Robert R J Elliott & Eric Strobl, 2007. "The Environmental Performance of Firms: The Role of Foreign Ownership, Training, and Experience," Discussion Papers, Department of Economics, University of Birmingham 07-08, Department of Economics, University of Birmingham.
    5. Anbumozhi, Venkatachalam & Chotichanathawewong, Qwanruedee & Murugesh, Thirumalainambi, 2011. "Information Disclosure Strategies for Green Industries," ADBI Working Papers, Asian Development Bank Institute 305, Asian Development Bank Institute.
    6. Mickwitz, Per, 2003. "Is it as bad as it sounds or as good as it looks? Experiences of Finnish water discharge limits," Ecological Economics, Elsevier, Elsevier, vol. 45(2), pages 237-254, June.
    7. Facundo Albornoz & Matthew A Cole & Robert J R Elliott & Marco G Ercolani, 2008. "In Search of Environmental Spillovers," Discussion Papers, Department of Economics, University of Birmingham 08-03, Department of Economics, University of Birmingham.
    8. Hettige, Hemamala & Mani, Muthukumara & Wheeler, David, 2000. "Industrial pollution in economic development: the environmental Kuznets curve revisited," Journal of Development Economics, Elsevier, Elsevier, vol. 62(2), pages 445-476, August.
    9. Sedigh, Golnaz, 2008. "Do environmental regulations reduce greenhouse gas emissions? A study on Canadian industries," MPRA Paper 10003, University Library of Munich, Germany.
    10. Blackman, Allen & Bannister, Geoffrey, 1997. "Community Pressure and Clean Technologies in the Informal Sector: An Econometric Analysis of the Adoption of Propane by Traditional Brickmakers in Ciudad Juarez, Mexico," Discussion Papers, Resources For the Future dp-97-16-rev, Resources For the Future.
    11. Gangadharan, Lata, 2006. "Environmental compliance by firms in the manufacturing sector in Mexico," Ecological Economics, Elsevier, Elsevier, vol. 59(4), pages 477-486, October.
    12. Reimann, Felix & Ehrgott, Matthias & Kaufmann, Lutz & Carter, Craig R., 2012. "Local stakeholders and local legitimacy: MNEs' social strategies in emerging economies," Journal of International Management, Elsevier, Elsevier, vol. 18(1), pages 1-17.
    13. Cole, Matthew A. & Elliott, Robert J.R. & Khemmarat, Khemrutai, 2013. "Local exposure to toxic releases: Examining the role of ethnic fractionalization and polarisation," Ecological Economics, Elsevier, Elsevier, vol. 93(C), pages 249-259.
    14. Robert Sova & Christophe Rault & Guglielmo Caporale & Anamaria Sova, 2014. "Improving Environmental Performance: A Challenge for Romania," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 57(3), pages 431-452, March.
    15. Clive Harris, 2003. "Private Participation in Infrastructure in Developing Countries : Trends, Impacts, and Policy Lessons," World Bank Publications, The World Bank, number 15124, August.
    16. Wheeler, David, 2001. "Racing to the bottom : foreign investment and air pollution in developing countries," Policy Research Working Paper Series 2524, The World Bank.
    17. Hua Wang & Ming Chen, 1999. "How the Chinese system of charges and subsidies affects pollution control efforts by China's top industrial polluters," Policy Research Working Paper Series 2198, The World Bank.

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