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Industrial environmental performance in China - the impact of inspections

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  • Dasgupta, Susmita
  • Laplante, Benoit
  • Namingi, Nlandu
  • Hua Wang

Abstract

Little empirical research has been done on monitoring and enforcement issues in environmental economics, especially to analyze the impact of monitoring and enforcement on polluters'environmental performance. No studies have been done in developing economies. The authors explore the impact of inspections, and the potential impact of pollution charges and citizen's complaints, on the environmental performance of polluters in China. Their analysis of plant-level data from the city of Zhenjiang shows that: 1) Inspections have a statistically significant impact on firm's environmental performance. 2) Pollution charges do not have a statistically significant effect on firms'performance - although the lack of variation in pollution charges in Zhenjiang precludes effectively capturing their impact. 3) Complaints have a significant impact on inspections and therefore on pollution control. Currently available data do not allow analysis of whether the cost of additional inspections is justified, but it is reasonable to speculate that additional inspections would improve social welfare in Zhenjiang, and that information and education campaigns are probably a good way to encourage citizen complaints.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2285.

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Date of creation: 29 Feb 2000
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Handle: RePEc:wbk:wbrwps:2285

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Keywords: Public Health Promotion; Environmental Economics&Policies; Water and Industry; Health Monitoring&Evaluation; Water Conservation; TF030632-DANISH CTF - FY05 (DAC PART COUNTRIES GNP PER CAPITA BELOW USD 2; 500/AL; Environmental Economics&Policies; Water and Industry; Health Monitoring&Evaluation; Sanitation and Sewerage;

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References

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  1. Downing, Paul B. & Watson, William Jr., 1974. "The economics of enforcing air pollution controls," Journal of Environmental Economics and Management, Elsevier, vol. 1(3), pages 219-236, November.
  2. Laplante, Benoit & Rilstone, Paul, 1996. "Environmental Inspections and Emissions of the Pulp and Paper Industry in Quebec," Journal of Environmental Economics and Management, Elsevier, vol. 31(1), pages 19-36, July.
  3. Lahiri, Kajal & Schmidt, Peter, 1978. "On the Estimation of Triangular Structural Systems," Econometrica, Econometric Society, Econometric Society, vol. 46(5), pages 1217-21, September.
  4. Deily, Mary E. & Gray, Wayne B., 1991. "Enforcement of pollution regulations in a declining industry," Journal of Environmental Economics and Management, Elsevier, vol. 21(3), pages 260-274, November.
  5. Malik, Arun S., 1990. "Markets for pollution control when firms are noncompliant," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages 97-106, March.
  6. Pargal, Sheoli & Wheeler, David, 1996. "Informal Regulation of Industrial Pollution in Developing Countries: Evidence from Indonesia," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 104(6), pages 1314-27, December.
  7. Nadeau, Louis W., 1997. "EPA Effectiveness at Reducing the Duration of Plant-Level Noncompliance," Journal of Environmental Economics and Management, Elsevier, vol. 34(1), pages 54-78, September.
  8. Beavis, Brian & Dobbs, Ian, 1987. "Firm behaviour under regulatory control of stochastic environmental wastes by probabilistic constraints," Journal of Environmental Economics and Management, Elsevier, vol. 14(2), pages 112-127, June.
  9. Magat, Wesley A & Viscusi, W Kip, 1990. "Effectiveness of the EPA's Regulatory Enforcement: The Case of Industrial Effluent Standards," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 33(2), pages 331-60, October.
  10. Linder, Stephen H. & McBride, Mark E., 1984. "Enforcement costs and regulatory reform: The agency and firm response," Journal of Environmental Economics and Management, Elsevier, vol. 11(4), pages 327-346, December.
  11. Hua Wang & Wheeler, David, 2000. "Endogenous enforcement and effectiveness of China's pollution levy system," Policy Research Working Paper Series 2336, The World Bank.
  12. Dasgupta, Susmita & Hua Wang & Wheeler, David, 1997. "Surviving success : policy reform and the future of industrial pollution in China," Policy Research Working Paper Series 1856, The World Bank.
  13. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
  14. Ahn, Seung C. & Schmidt, Peter, 1995. "Efficient estimation of models for dynamic panel data," Journal of Econometrics, Elsevier, Elsevier, vol. 68(1), pages 5-27, July.
  15. Harford, Jon D., 1978. "Firm behavior under imperfectly enforceable pollution standards and taxes," Journal of Environmental Economics and Management, Elsevier, vol. 5(1), pages 26-43, March.
  16. Hua Wang & Wheeler, David, 1996. "Pricing industrial pollution in China : an econometric analysis of the levy system," Policy Research Working Paper Series 1644, The World Bank.
  17. Dasgupta, Susmita & Wheeler, David, 1997. "Citizen complaints as environmental indicators : evidence from China," Policy Research Working Paper Series 1704, The World Bank.
  18. Harrington, Winston, 1988. "Enforcement leverage when penalties are restricted," Journal of Public Economics, Elsevier, Elsevier, vol. 37(1), pages 29-53, October.
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