IDEAS home Printed from https://ideas.repec.org/a/eee/jeeman/v121y2023ics0095069623000876.html
   My bibliography  Save this article

Emission leakage and the effectiveness of regional environmental regulation in China

Author

Listed:
  • Zhang, Bing
  • Zhao, Daxuan

Abstract

This paper examines the emission leakage by the regional environmental regulation applied in Beijing and its surrounding area. Using the unique firm-level daily emission data, we develop a novel model to estimate the size of immediate leakage through the price mechanism. Our empirics find that leakage offsets about 60% of the total amount of emission reduction in the regulated region and the aggregate emission reduction is less than two percent. We also use the iron and steel industry as an example to show how the prices of input and output factors respond to the regulation.

Suggested Citation

  • Zhang, Bing & Zhao, Daxuan, 2023. "Emission leakage and the effectiveness of regional environmental regulation in China," Journal of Environmental Economics and Management, Elsevier, vol. 121(C).
    • Handle: RePEc:eee:jeeman:v:121:y:2023:i:c:s0095069623000876
    DOI: 10.1016/j.jeem.2023.102869
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0095069623000876
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jeem.2023.102869?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. 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.
    2. Arik Levinson & M. Scott Taylor, 2008. "Unmasking The Pollution Haven Effect," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(1), pages 223-254, February.
    3. Fu, Shihe & Viard, V. Brian & Zhang, Peng, 2022. "Trans-boundary air pollution spillovers: Physical transport and economic costs by distance," Journal of Development Economics, Elsevier, vol. 155(C).
    4. Eskeland, Gunnar S. & Harrison, Ann E., 2003. "Moving to greener pastures? Multinationals and the pollution haven hypothesis," Journal of Development Economics, Elsevier, vol. 70(1), pages 1-23, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yang, Yongwen & Lee, Juhee, 2024. "Assessing Tax Revenue Implications of Environmental Policy: A Case Study of China’s Channel City Policy," 2024 Annual Meeting, July 28-30, New Orleans, LA 344021, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antoci, Angelo & Galdi, Giulio & Russu, Paolo, 2022. "Environmental degradation and comparative advantage reversal," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    2. Shahbaz, Muhammad & Nasreen, Samia & Abbas, Faisal & Anis, Omri, 2015. "Does foreign direct investment impede environmental quality in high-, middle-, and low-income countries?," Energy Economics, Elsevier, vol. 51(C), pages 275-287.
    3. Zeng, Dao-Zhi & Zhao, Laixun, 2009. "Pollution havens and industrial agglomeration," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 141-153, September.
    4. Sneeringer Stacy E, 2009. "Effects of Environmental Regulation on Economic Activity and Pollution in Commercial Agriculture," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-35, July.
    5. Ferguson, Shon & Heijmans, Roweno J.R.K., 2023. "Climate Policy and Trade in Polluting Technologies," Working Paper Series 1470, Research Institute of Industrial Economics.
    6. repec:wvu:wpaper:09-02 is not listed on IDEAS
    7. Svetlana Batrakova & Ronald Davies, 2012. "Is there an environmental benefit to being an exporter? Evidence from firm-level data," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(3), pages 449-474, September.
    8. Arouri, Mohamed El Hedi & Caporale, Guglielmo Maria & Rault, Christophe & Sova, Robert & Sova, Anamaria, 2012. "Environmental Regulation and Competitiveness: Evidence from Romania," Ecological Economics, Elsevier, vol. 81(C), pages 130-139.
    9. Jeffrey A. Frankel & Andrew K. Rose, 2005. "Is Trade Good or Bad for the Environment? Sorting Out the Causality," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 85-91, February.
    10. Tol, Richard S.J., 2017. "The structure of the climate debate," Energy Policy, Elsevier, vol. 104(C), pages 431-438.
    11. Robert Elliott & Ying Zhou, 2013. "Environmental Regulation Induced Foreign Direct Investment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(1), pages 141-158, May.
    12. Yunyi Hu & Haitao Yin & Jon J. Moon, 2022. "Environmental regulation and foreign investment: Evidence from China," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 31(4), pages 862-883, November.
    13. Yuqing Ge & Yucai Hu & Shenggang Ren, 2020. "Environmental Regulation and Foreign Direct Investment: Evidence from China’s Eleventh and Twelfth Five-Year Plans," Sustainability, MDPI, vol. 12(6), pages 1-18, March.
    14. Xingye Zhou & Helian Xu, 2024. "Emissions Reduction Target Plan and Export Product Quality: Evidence from China’s 11th Five-Year Plan," Sustainability, MDPI, vol. 16(4), pages 1-21, February.
    15. Wen Jun & Muhammad Zakaria & Syed Jawad Hussain Shahzad & Hamid Mahmood, 2018. "Effect of FDI on Pollution in China: New Insights Based on Wavelet Approach," Sustainability, MDPI, vol. 10(11), pages 1-20, October.
    16. Hokkanen, Topi, 2023. "Optimal carbon leakage," Bank of Finland Research Discussion Papers 15/2023, Bank of Finland.
    17. Nelly Exbrayat & Stéphane Riou & Skerdilajda Zanaj, 2021. "A global carbon tax? Why firm mobility and heterogeneity matters," DEM Discussion Paper Series 21-17, Department of Economics at the University of Luxembourg.
    18. Koch, Nicolas & Basse Mama, Houdou, 2019. "Does the EU Emissions Trading System induce investment leakage? Evidence from German multinational firms," Energy Economics, Elsevier, vol. 81(C), pages 479-492.
    19. Jean-Marie Grether & Nicole Andréa Mathys & Jaime de Melo, 2015. "Unravelling the Worldwide Pollution Haven Effect," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 23, pages 581-612, World Scientific Publishing Co. Pte. Ltd..
    20. Bo Yuan & Qiuyue Yin, 2024. "Does green foreign investment contribute to air pollution abatement? Evidence from China," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(2), pages 912-938, March.
    21. Liu, Liyun & Zhao, Zhenzhi & Su, Bin & Ng, Tsan Sheng & Zhang, Mingming & Qi, Lin, 2021. "Structural breakpoints in the relationship between outward foreign direct investment and green innovation: An empirical study in China," Energy Economics, Elsevier, vol. 103(C).

    More about this item

    Keywords

    Leakage; Environmental regulation; Industrial emissions; China;
    All these keywords.

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:121:y:2023:i:c:s0095069623000876. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622870 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.