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Other environmental governance issues


This World Bank research focuses on regulatory and other approaches for protecting environmental resources and ameliorating pollution problems.

Contact: Hua Wang,

 Research outputs 

Research has also been conducted in analyzing other environmental governance issues. The major findings include:

  • Foreign direct investment (FDI) may be affected by weak environmental policies
  • Environmental enforcement may be endogenous
  • Fiscal decentralization may negatively affect the environmental enforcement without democracy
  • Collective ownership has a positive relationship with environmental performance.
 Research outputs

"Economic structure, development policy and environmental quality : an empirical analysis of environmental Kuznets curves with Chinese municipal data," Jie He and Hua Wang, World Bank Policy Research Working Paper 5756.  2011.

In many cases, the relationship between environmental pollution and economic development can be generally depicted by an inverted U-shaped curve, or an environmental Kuznets curve, where pollution increases with income at the beginning and decreases after a certain level of income. However, what determine the shape of an enviornmental Kuznets curve, such as the height and the turning point of the curve, have not been thoroughly studied. A good understanding of the determinants is vitally important to the development community, especially for the developing world, where income growth is a high priority and yet environmental pollution also needs to be carefully controlled. This study analyzes the impacts of economic structure, development strategy and environmental regulation on the shape of the environmental Kuznets curve with a city-level panel dataset obtained from China. The results show that economic structure, development strategy and environmental regulation can all have important implications on the relationship between environmental environmental quality and economic development but the impacts can be different at different development stages.

"Foreign Direct Investment and Pollution Havens: Evaluating the Evidence from China," Judith Dean, Mary Lovely, and Hua Wang, Journal of Development Economics 70(1): 1-23, 2009.

One of the most contentious debates today is whether pollution-intensive industries seek locations with weak environmental standards, turning these locations into 'pollution havens." Empirical studies to date show little evidence to support the pollution haven hypothesis, but suffer potentially from omitted variable bias, specification, and measurement errors. This paper estimates the strength of pollution-haven behavior by examining the location choices of equity joint venture (EJV) projects in China. We derive a location choice model from a theoretical framework that incorporates the firm's production and abatement decision, agglomeration and factor abundance. We estimate conditional logit and nested multinomial logit models using new data sets containing information on a sample of EJV projects, effective environmental levies on water pollution, and estimates of Chinese emissions and abatement costs for 3-digit ISIC industries. Results from 2886 manufacturing joint venture projects during 1993-1996 show EJVs from all source countries go into provinces with high concentrations of foreign investment, relatively abundant stocks of skilled workers, concentrations of foreign firms, and special incentives. Environmental stringency does affect location choice, but not in the manner described by the pollution haven hypothesis. Relatively weak environmental levies are a significant attraction for joint ventures with partners from Hong Kong, Macao, Taiwan, and other Southeast Asian developing countries. In contrast, joint ventures with partners from industrial country sources (e.g., US, UK and Japan) are actually attracted by stringent environmental levies, regardless of the pollution intensity of the industry. We discuss the likely role of technological differences in explaining these results.

“Environmental Resources and Economic Growth in China,” James Roumasset, Kimberly Burnett, and Hua Wang, in eds., Loren Brandt and Thomas G. Rawski, China’s Great Transformation: Origins, Mechanisms, and Consequences of the Post-Reform Economic Boom, Cambridge Univ. Press, 2008.

"China: Seeking Meaningful Decentralization to Achieve Sustainability,” Changhua Wu and Hua Wang, in eds., Albert Breton, Giorgio Brosio, Silvana Dalmazzone, and Giovanna Garrone, Environmental Governance and Decentralization: Country Studies, Cheltenham: Elgar, 2007.

“Industrial Ownership and Environmental Performance: Evidence from China,” Hua Wang and Yanhong Jin, Environmental and Resource Economics 36(3): 255-73, 2006.

This study explores the differences in pollution control performance of industries with different types of ownership – State owned (SOE), collectively or community owned (COE), and privately owned (POE). A theoretic analysis is conducted and followed by an empirical assessment with Chinese data. The empirical results show that the COEs in China have better environmental performances in water pollution discharges than the SOEs and the POEs, suggesting that COEs may internalize environmental externalities.

“Incomplete Enforcement of Pollution Regulation: Bargaining Power of Chinese Factories,” Hua Wang, Nlandu Mamingi, Benoit Laplante and Susmita Dasgupta, Environmental and Resource Economics 24: 245–262, 2003. (Based on World Bank Policy Research Working Paper 2756, 2002)

Only a limited number of papers have empirically examined the determinants of the monitoring and enforcement activities performed by the environmental regulator. Moreover, most of these studies have taken place in thecontext of developed countries. In this paper, we empirically examine the determinants of the enforcement of pollution charges in China.More precisely, we seek to identify the characteristics which may give firms more or less bargaining power with local environmental authorities pertaining to the enforcement(collection) of pollution charges. Firms from the private sector appear to have less bargaining power than state-owned enterprises. Firms facing an adverse financial situation also appear to have more bargaining power.Finally, we also show that the higher the social impact of a firm's emissions (as measured by the presence of complaints), the smaller the bargaining power of the firms with local environmental authorities.

“Can China Grow and Safeguard Its Environment? The Case of Industrial Pollution,” David Wheeler,Hua Wang and Susmita Dasgupta, in eds., Nichloas C. Hope, Dennia Tao Yang and Mu Yang Li, How Far Across the River? Chinese Policy Reform at the Millennium, Stanford University Press, 2003.

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