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The clean-up of Chinese manufacturing: Examining the role played by changing techniques of production

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  • Cole, Matthew A.
  • Zhang, Liyun

Abstract

We document the recent reductions in the pollution intensity of Chinese manufacturing and utilise the methods developed and applied by Levinson (2009, 2015) and Brunel (2017) to explain the underlying causes of this pollution clean-up. We find that, unlike in the US, compositional changes to the Chinese manufacturing sector have actually increased pollution emissions. This implies that the observed reductions in pollution intensities have been caused by large improvements in techniques of production driven by technology and/or regulations. The dominance of the technique effect in driving down pollution intensities is found whether we measure an ‘indirect’ technique effect or a direct effect using Laspeyres and Paasche indices.

Suggested Citation

  • Cole, Matthew A. & Zhang, Liyun, 2019. "The clean-up of Chinese manufacturing: Examining the role played by changing techniques of production," Economics Letters, Elsevier, vol. 180(C), pages 11-14.
    • Handle: RePEc:eee:ecolet:v:180:y:2019:i:c:p:11-14
    DOI: 10.1016/j.econlet.2019.03.030
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    References listed on IDEAS

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    1. Arik Levinson, 2015. "A Direct Estimate of the Technique Effect: Changes in the Pollution Intensity of US Manufacturing, 1990-2008," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(1), pages 43-56.
    2. Arik Levinson, 2009. "Technology, International Trade, and Pollution from US Manufacturing," American Economic Review, American Economic Association, vol. 99(5), pages 2177-2192, December.
    3. Claire Brunel, 2017. "Pollution Offshoring and Emission Reductions in EU and US Manufacturing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 621-641, November.
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    Cited by:

    1. Polina Ustyuzhanina, 2022. "Decomposition of air pollution emissions from Swedish manufacturing," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(2), pages 195-223, April.
    2. Jevan M. Cherniwchan & M. Scott Taylor, 2022. "International Trade and the Environment: Three Remaining Empirical Challenges," NBER Working Papers 30020, National Bureau of Economic Research, Inc.
    3. Mao, Jie & Wang, Chunhua & Yin, Haitao, 2023. "Corporate responses to air quality regulation: Evidence from a regional environmental policy in China," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    4. Dan Xie, 2024. "China’s Manufacturing Pollution, Environmental Regulation and Trade," FIW Working Paper series 198, FIW.
    5. Kevin Andrew & Jevan Cherniwchan & Mamoon Kader & Hashmat Khan, 2024. "Geography and the Technique Effect: Evidence from Canada," Department of Economics Working Papers 2024-08, McMaster University.

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    More about this item

    Keywords

    Pollution intensity; Composition effect; Technique effect;
    All these keywords.

    JEL classification:

    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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