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

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  • Jin, Yanhong
  • Lin, Liguo

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.

Suggested Citation

  • Jin, Yanhong & Lin, Liguo, 2014. "China's provincial industrial pollution: the role of technical efficiency, pollution levy and pollution quantity control," Environment and Development Economics, Cambridge University Press, vol. 19(1), pages 111-132, February.
    • Handle: RePEc:cup:endeec:v:19:y:2014:i:01:p:111-132_00
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    Cited by:

    1. Po Kou & Ying Han & Xiaoyuan Qi & Yuanxian Li, 2022. "Does China's policy of carbon emission trading deliver sulfur dioxide reduction co-benefits?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(5), pages 6224-6245, May.
    2. Ankai Xu, 2016. "Environmental regulations and competitiveness: evidence based on Chinese firm data," CIES Research Paper series 47-2016, Centre for International Environmental Studies, The Graduate Institute.
    3. Pedro Naso & Yi Huang Author Name: Tim Swanson, 2017. "The Porter Hypothesis Goes to China: Spatial Development, Environmental Regulation and Productivity," CIES Research Paper series 53-2017, Centre for International Environmental Studies, The Graduate Institute.
    4. Dong, Zhaoyingzi & Wang, Shaojian & Zhang, Weiwen & Shen, Huijun, 2022. "The dynamic effect of environmental regulation on firms’ energy consumption behavior-Evidence from China's industrial firms," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    5. Chen, Yvonne Jie & Li, Pei & Lu, Yi, 2018. "Career concerns and multitasking local bureaucrats: Evidence of a target-based performance evaluation system in China," Journal of Development Economics, Elsevier, vol. 133(C), pages 84-101.
    6. Erhong Wang & Qun Cao & Yongqiang Ding & Huaping Sun, 2022. "Fiscal Decentralization, Government Environmental Preference and Industrial Green Transformation," Sustainability, MDPI, vol. 14(21), pages 1-20, October.
    7. Perrings, Charles, 2014. "Environment and development economics 20 years on," Environment and Development Economics, Cambridge University Press, vol. 19(3), pages 333-366, June.

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