Hostname: page-component-586b7cd67f-l7hp2 Total loading time: 0 Render date: 2024-11-20T09:38:21.821Z Has data issue: false hasContentIssue false
  • English
  • Français

China's provincial industrial pollution: the role of technical efficiency, pollution levy and pollution quantity control

Published online by Cambridge University Press:  19 November 2013

Yanhong Jin  and
Liguo Lin
Yanhong Jin
Affiliation:
Department of Agricultural, Food and Resource Economics, Rutgers University, New Brunswick, NJ 08850, USA. Tel: 848-932-9139. E-mail: [email protected]
Liguo Lin
Affiliation:
School of Economics and Institute for Advanced Research, Key Laboratory of Mathematical Economics (SUFE) of Ministry of Education, University of Finance and Economics, Shanghai, China. E-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Using China's provincial economic and pollution data from 1992 to 2008, we employ data envelope analysis and econometric analyses to explicitly estimate technical efficiency and examine the role of technical efficiency, pollution control instruments (pollution levy and pollution quantity control) and prices of production inputs on pollution intensity. We find that an increase of labor wage and a decrease of capital cost are associated with an improvement in technical efficiency. The levy rates of air pollution improve technical efficiency but pollution quantity control targets have no statistically significant effect on technical efficiency. On the other hand, technical efficiency, the effective levy rates, pollution quantity control targets and capital cost have a negative effect but wage has a positive effect on pollution intensity. The importance of production input prices in pollution intensity and technical efficiency suggests alternative channels for industrial pollution control as well as cautions for the unintended consequence on the environment if any policy changes are made relating to labor and capital costs.

Type
Research Article
Information
Environment and Development Economics , Volume 19 , Special Issue 1: China's Environmental Policy , February 2014 , pp. 111 - 132
Copyright
Copyright © Cambridge University Press 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Ahmad, M. and Bravo-Ureta, B.E. (1996), ‘Technical efficiency measures for dairy farms using panel data: a comparison of alternative model specifications’, Journal of Productivity Analysis 7(4): 399–415.Google Scholar
Anderson, T.W. (1951), ‘Estimating linear restrictions on regression coefficients for multivariate normal distributions’, Annals of Mathematical Statistics 22(3): 327–351.Google Scholar
Bi, J. and Liu, B. (2009), ‘Water pollution and its control in the Tai Lake Basin’, in Bi, J., Otsuka, K., Ge, J. and Wang, S. (eds), Stakeholder Involvement in Water Environment Conservation in China and Japan – Building Effective Governance in the Tai Lake Basin, Chiba: IDE-JETRO (Institute of Developing Economics – Japan External Trade Organization), pp. 1–14.Google Scholar
BlackSmithInstitute (2007), The World's Worst Polluted Places, project of the Blacksmith Institute, New York, [Available at] http://www.blacksmithinstitute.org/the-2007-top-ten-of-worst-polluted-places.html.Google Scholar
Bravo-Ureta, B.E., Solis, D., Moreira López, V.H., Maripani, J.F., Thiam, A., and Rivas, T. (2007), ‘Technical efficiency in farming: a meta-regression analysis’, Journal of Productivity Analysis 27(1): 57–72.Google Scholar
Bui, L.T.M. and Mayer, C.J. (2003), ‘Regulation and capitalization of environmental amenities: evidence from the toxic release inventory in Massachusetts’, Review of Economics and Statistics 85(3): 693–708.Google Scholar
Charnes, W. (1978), ‘Measuring the efficiency of decision making units’, European Journal of Operational Research 2(6): 429–444.Google Scholar
Cooper, W.W., Seiford, L.M., and Tone, T. (2006), Introduction to Data Envelopment Analysis and Its Uses: With DEA-Solver Software and References, New York: Springer.Google Scholar
Dasgupta, S., Laplante, B., Mamingi, N., and Wang, H. (2001), ‘Inspections, pollution prices, and environmental performance: evidence from China’, Ecological Economics 36(3): 487–498.Google Scholar
Dasgupta, S., Wang, H., and Wheeler, D. (eds) (2007), Disclosure Strategies for Pollution Control ’, in Tietenberg, T. and Folmer, H. (eds), The International Yearbook of Environmental and Resource Economics 2006/2007, Cheltenham: Edward Elgar.Google Scholar
Dean, J.M., Lovely, M.E., and Wang, H. (2009), ‘Are foreign investors attracted to weak environmental regulations? Evaluating the evidence from China’, Journal of Development Economics 90(1): 1–13.CrossRefGoogle Scholar
Di, W. (2007), ‘Pollution abatement cost savings and FDI inflows to polluting sectors in China’, Environment and Development Economics 12(6): 775–798.Google Scholar
Fare, R. and Primont, D. (1995), Multioutput Production and Duality: Theory and Applications, Boston, MA: Kluwer Academic Publishers.Google Scholar
Foulon, J., Lanoie, P., and Laplante, B. (2002), ‘Incentives for pollution control: regulation or information?’, Journal of Environmental Economics and Management 44(1): 169–187.Google Scholar
García, J.H., Sterner, T., and Afsah, S. (2007), ‘Public disclosure of industrial pollution: the PROPER approach for Indonesia?’, Environment and Development Economics 12(6): 739–756.Google Scholar
García, J.H., Afsah, S., and Sterner, T. (2009), ‘Which firms are more sensitive to public disclosure schemes for pollution control? Evidence from Indonesia's PROPER Program’, Environmental and Resource Economics 42(2): 151–168.Google Scholar
Grossman, G.M. (1995), ‘Pollution and growth: what do we know?’ in Goldin, I. and Winters, L.A. (eds), The Economics of Sustainable Development, Cambridge: Cambridge University Press, pp. 19–45.Google Scholar
Grossman, G.M. and Krueger, A.B. (1991), Environmental Impacts of a North American Free Trade Agreement, Cambridge, MA: National Bureau of Economic Research.Google Scholar
Jiang, T. and McKibbin, W.J. (2002), ‘Assessment of China's pollution levy system: an equilibrium pollution approach’, Environment and Development Economics 7(1): 75–105.Google Scholar
Jin, Y., Wang, H., and Wheeler, D. (2010), ‘Environmental performance rating and disclosure: an empirical investigation of China's Green Watch Program’, World Bank Policy Research Working Paper No. 5420, Washington, DC.Google Scholar
Kennedy, P.W., Laplante, B., and Maxwell, J. (1994), ‘Pollution policy: the role for publicly provided information’, Journal of Environmental Economics and Management 26(1): 31–43.CrossRefGoogle Scholar
Li, M. (2010), ‘Decomposing the change of CO2 emissions in China: a distance function approach’, Ecological Economics 70(1): 77–85.Google Scholar
Lin, L. (2011), ‘Enforcement of pollution levies in China’, Working Paper, Department of Economics, Shanghai University of Finance and Economics, Shanghai.Google Scholar
Managi, S. and Kaneko, S. (2009), ‘Environmental performance and returns to pollution abatement in China’, Ecological Economics 68(6): 1643–1651.Google Scholar
Nishimizu, M. and Page, J.M. (1982), ‘Total factor productivity growth, technological progress and technical efficiency change: dimensions of productivity change in Yugoslavia, 1965–78’, Economic Journal 92(368): 920–936.Google Scholar
Oberholzer-Gee, F. and Mitsunari, M. (2006), ‘Information regulation: do the victims of externalities pay attention?’, Journal of Regulatory Economics 30(2): 141–158.CrossRefGoogle Scholar
SEPA (2006), China Environmental Status Report, Beijing: State Environmental Protection Administration.Google Scholar
Siddy, D. (2009), ‘Exchanges and sustainable investment’, report prepared for the World Federation of Exchange, Delsus Limited.Google Scholar
Thiam, A., Bravo-Ureta, B.E. and Rivas, T.E. (2001), ‘Technical efficiency in developing country agriculture: a meta-analysis’, Agricultural Economics 25(2–3): 235–243.Google Scholar
Tyteca, D. (1997), ‘Linear programming models for the measurement of environmental performance of firms – concepts and empirical results’, Journal of Productivity Analysis 8(2): 183–197.CrossRefGoogle Scholar
Wang, H. and Jin, Y. (2007), ‘Industrial ownership and environmental performance: evidence from China’, Environmental and Resource Economics 36(3): 255–273.Google Scholar
Wang, H. and Wheeler, D. (2003), ‘Equilibrium pollution and economic development in China’, Environment and Development Economics 8(3): 451–466.CrossRefGoogle Scholar
Wang, H. and Wheeler, D. (2005), ‘Financial incentives and endogenous enforcement in China's pollution levy system’, Journal of Environmental Economics and Management 49(1): 174–196.Google Scholar
Wang, H., Mamingi, N., Laplante, B., and Dasgupta, S. (2003), ‘Incomplete enforcement of pollution regulation: bargaining power of Chinese factories’, Environmental and Resource Economics 24(3): 245–262.Google Scholar
Wang, H., Bi, J., Wheeler, D., Wang, J., Cao, D., Lu, G., and Wang, Y. (2004), ‘Environmental performance rating and disclosure: China's GreenWatch Program’, Journal of Environmental Management 71(2): 123–133.Google Scholar
WHO (2005), Environmental Health Country Profile – China, [Available at] http://www.environment-health.asia/fileupload/China_EHCP_EHDS_9jun05.pdf.Google Scholar
Wooldridge, J.M. (2002), Econometric Analysis of Cross Section and Panel Data, Cambridge, MA: MIT Press.Google Scholar
Zaim, O. (2004), ‘Measuring environmental performance of state manufacturing through changes in pollution intensities: a DEA framework’, Ecological Economics 48(1): 37–47.Google Scholar
Zhou, P., Poh, K.L., and Ang, B.W. (2007), ‘A non-radial DEA approach to measuring environmental performance’, European Journal of Operational Research 178(1): 1–9.Google Scholar
Zhou, P., Ang, B., and Poh, K. (2008a), ‘Measuring environmental performance under different environmental DEA technologies’, Energy Economics 30(1): 1–14.Google Scholar
Zhou, P., Ang, B., and Poh, K. (2008b), ‘A survey of data envelopment analysis in energy and environmental studies’, European Journal of Operational Research 189(1): 1–18.Google Scholar
Supplementary material: PDF

Jin and Lin Supplementary Material

Appendix

Download Jin and Lin Supplementary Material(PDF)
PDF 77.2 KB