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Pollution charges, community pressure, and abatement cost of industrial pollution in China


  • Hua Wang


The author evaluates the strength of the effect that community pressure and pollution charges have on industrial pollution control in China, and estimates the marginal cost of pollution abatement. He examines a well-documented set of plant-level data, combined with community-level data, to assess the impact of pollution charges and community pressure on industrial behavior in China. He constructs and estimates an industrial organic water pollution discharge model for plants that violate standards for pollution discharge, pay pollution charges, and are constantly under community pressure to further abate pollution. He creates a model and estimates implicit prices for pollutiondischarges from community pressure, which are determined jointly by the explicit price, the pollution levy. He finds that the implicit discharge price is at least as high as the explicit price. In other words, community pressure not only exists, but may be as strong an incentive as the pollution charge is for industrial firms to control pollution in China. The author's modeling approach also provides a way to estimate the marginal cost of pollution abatement. The empirical results show that the current marginal cost of abatement is about twice the effective charge rate in China.

Suggested Citation

  • Hua Wang, 2000. "Pollution charges, community pressure, and abatement cost of industrial pollution in China," Policy Research Working Paper Series 2337, The World Bank.
  • Handle: RePEc:wbk:wbrwps:2337

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    References listed on IDEAS

    1. Susmita Dasgupta & Mainul Huq & David Wheeler & Chonghua Zhang, 2001. "Water pollution abatement by Chinese industry: cost estimates and policy implications," Applied Economics, Taylor & Francis Journals, vol. 33(4), pages 547-557.
    2. Dasgupta, Susmita & Wheeler, David, 1997. "Citizen complaints as environmental indicators : evidence from China," Policy Research Working Paper Series 1704, The World Bank.
    3. Hua Wang & Wheeler, David, 2000. "Endogenous enforcement and effectiveness of China's pollution levy system," Policy Research Working Paper Series 2336, The World Bank.
    4. Pargal, Sheoli & Hettige, Hemamala & Singh, Manjula & Wheeler, David, 1997. "Formal and informal regulation of industrial pollution : comparative evidence from Indonesia and the United States," Policy Research Working Paper Series 1797, The World Bank.
    5. Pargal, Sheoli, et al, 1997. "Formal and Informal Regulation of Industrial Pollution: Comparative Evidence from Indonesia and the United States," World Bank Economic Review, World Bank Group, vol. 11(3), pages 433-450, September.
    6. 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.
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    Cited by:

    1. Hua Wang & Yanhong Jin, 2007. "Industrial Ownership and Environmental Performance: Evidence from China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(3), pages 255-273, March.
    2. Cheng, Jinhua & Dai, Sheng & Ye, Xinyue, 2016. "Spatiotemporal heterogeneity of industrial pollution in China," China Economic Review, Elsevier, vol. 40(C), pages 179-191.
    3. Maria Angeles O. Catelo, 2007. "Impact Evaluation of the Environmental User Fee System: A Stakeholder Perspective," EEPSEA Special and Technical Paper tp200707t2, Economy and Environment Program for Southeast Asia (EEPSEA), revised Jul 2007.
    4. Wang, Hua & Jin, Yanhong H., 2002. "Ownership And Industrial Pollution Control: Evidence From China," 2002 Annual meeting, July 28-31, Long Beach, CA 19671, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Das, Amarendra, 2009. "Does Firm Ownership Differentiate Environmental Compliance? Evidence from Indian Chromite Mining Industry," MPRA Paper 18716, University Library of Munich, Germany.


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