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The Consequences of Spatially Differentiated Water Pollution Regulation in China

Author

Listed:
  • Zhao Chen

  • Matthew Kahn

  • Liu Yu

  • Zhi Wang

Abstract

China’s environmental regulators have sought to reduce the Yangtze River’s water pollution. This paper documents that this regulatory effort has had two unintended consequences. First, the regulation’s spatial differential stringency has displaced economic activity upstream. As polluting activity agglomerates upstream, more Pigouvian damage is caused downstream. Second, the regulation has focused on reducing one dimension of water pollution called chemical oxygen demand (COD). Thus, local officials face weak incentives to engage in costly effort to reduce other non-targeted but more harmful water pollutants such as petroleum, lead, mercury, and phenol. [Working Paper 22507]

Suggested Citation

  • Zhao Chen & Matthew Kahn & Liu Yu & Zhi Wang, 2016. "The Consequences of Spatially Differentiated Water Pollution Regulation in China," Working Papers id:11231, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:11231
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    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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