Industrial pollution in economic development: Kuznets revisited

Using new international data, the authors test for an inverse U-shaped, or"Kuznets,"relationship between industrial water pollution and economic development. They measure the effect of income growth on three proximate determinants of pollution: the share of manufacturing in total output, the sectoral composition of manufacturing, and the intensity (per unit of output) of industrial pollution at the"end of pipe."They find that the manufacturing share of output follows a Kuznets-type trajectory, but the other two determinants do not. Sectoral composition gets"cleaner"through middle-income status and then stabilizes. At the end of the pipe, pollution intensity declines strongly with income. The authors attribute this partly to stricter regulation as income increases and partly to pollution-labor complementarity in production. When they combine the three relationships, they do not find a Kuznets relationship. Instead, total industrial water pollution rises rapidly through middle-income status and remains roughly constant thereafter. To explore the implications of their findings, the authors stimulate recent trends in industrial water pollution for industrial economies in the OECD (Organization for the Economic Cooperation and Development), the newly industrialized countries, Asian developing countries, and ex-COMECON (Poland and former Soviet Union) economies. They find roughly stable emissions in the OECD and ex-COMECON economies, moderate increases in the newly industrialized countries, and rapidly growing pollution in the Asian developing countries. Their estimates for the 1980s suggest that Asian developing countries displaced the OECD economies as the greatest generators of industrial water pollution. Generally, however, the negative feedback from economic development to pollution intensity was sufficient to hold total world pollution growth toabout 15 percent over the 12-year sample period.Water and Industry,Public Health Promotion,Environmental Economics&Policies,Sanitation and Sewerage,Pollution Management&Control,Environmental Economics&Policies,Water and Industry,TF030632-DANISH CTF - FY05 (DAC PART COUNTRIES GNP PER CAPITA BELOW USD 2,500/AL,Sanitation and Sewerage,Pollution Management&Control

What improves environmental performance? evidence from Mexican industry

Using new survey evidence, the authors analyze the effects of regulation, plant-level management policies, and plant and firm characteristics on environmental performance in Mexican factories. They focus especially on management policies: the degree of effort to improve environmental performance and the type of management strategy adopted. They index effort with two variables: adoption of ISO 14000-type procedures for pollution management and use of plant personnel for environmental inspection and control. Proxies for strategic orientation are two indices of mainstreaming: assigning environmental responsibilities to general managers instead of specialized environmental managers, and providing environmental training for all plant employees, not just specialists. Detailed survey data let them test the performance impact of such factors as ownership, scale, sector, trade and other business relationships, local regulatory enforcement, local community pressure, management education and experience, and workers'general education. Their findings are: 1) Process is important. Plants that institute ISO 14000-type internal management procedures show superior environmental performance. 2) Mainstreaming works. Environmental training for all plant personnel is more effective than developing a cadre of environmental specialists, and assigning environmental tasks to general managers is more effective than using special environmental managers. 3) Regulatory pressure works. Plants that have experienced regulatory inspections and enforcement are significantly cleaner than those that have not. 4) Public scrutiny promotes stronger environmental policies. Publicly traded Mexican firms are significantly cleaner than privately held firms. 5) Size matters. Large plants in multiplant firms are much more likely to adopt policies that improve environmental performance. 6) OECD (Organization for Economic Cooperation and Development) influences do not matter. It is generally assumed that plants linked to OECD economies show superior environmental performance, but they find no evidence that OECD links--including multinational ownership, trade, management training, or management experience--affect environmental performance. 7) New technology is not significantly cleaner. They find no evidence that plants with newer equipment perform better environmentally (once other factors are accounted for). 8) Education promotes clean production. Plants with more highly educated workers show significantly better environmental management efforts and performance.Environmental Economics&Policies,Agricultural Knowledge&Information Systems,Public Health Promotion,Health Monitoring&Evaluation,Water and Industry,Environmental Governance,Water and Industry,Agricultural Knowledge&Information Systems,Environmental Economics&Policies,Health Monitoring&Evaluation

Economic development, environmental regulation, and the international migration of toxic industrial pollution : 1960-88

Several previous studies have asked whether environmental controls imposed in the industrial economies are diverting investments in pollution-intensive activities off-shore. Broadly, these studies conclude that direct investment does not appear to be stimulated by such regulations, partly because the cost of emission controls is generally a tiny fraction of operating costs. Yet direct investment reflects only part of what may be happening to world production patterns. Technology transfers may occur with no simultaneous direct investments, and production may readily shift toward a different global distribution without either direct investment or technology transfer. The authors attempt a general test of the displacement hypothesis, developing time series estimates of manufacturing pollution intensity for a large sample of developed and developing countries between 1960 and 1988. Among their conclusions: As a result of shifts in industrial composition, total manufacturing emissions relative to GDP grow faster than GDP at lower levels of per capita income and slower than GDP at higher levels of income. This happens because manufacturing has a declining share of GDP at higher income levels, not because of any shift toward a cleaner mix of manufacturing activities. The more rapidly growing high-income countries have actually enjoyed negative growth in toxic intensity of their manufacturing mix. Stricter regulation of pollution-intensive production in the OECD countries appears to have led to significant locational displacement, with consequent acceleration of industrial pollution intensity in developing countries. The poorest economies seem to have the highest growth in toxic intensity. One cannot, of course, be certain of the causal connection. Pollution intensity has grown most rapidly in developing economies that are relatively closed to world market forces. Relatively closed, fast-growing economies experienced rapid structural transitions toward greater toxic intensity. The opposite seems to have been true for more open economies.Environmental Economics&Policies,Economic Theory&Research,Energy and Environment,Water and Industry,Health Monitoring&Evaluation

Formal and informal regulation of industrial pollution : comparative evidence from Indonesia and the United States

The authors start from the premise that governments act as agents of the public in regulating pollution, using the instruments at their disposal. But when formal regulatory mechanisms are absent or ineffective, communities will seek other means of translating their preferences into reality. Recent empirical work suggests the widespread existence of such informal regulation: communities are often ableto negotiate with or otherwise informally pressure polluting plants in their vicinity to clean up. Their thesis is that such informal regulation is likely wherever formal regulation leaves a gap between actual and locally preferred environmental quality. They use plant-level data from Indonesia and the United States -two countries that are very different, both socio-economically and in terms of pollution regulation- to test a model of equilibrium pollution under informal regulation. Their results suggest three common elements across countries and pollutants: abatement is generally subject to significant scale economies; within-country variations in labor and energy prices have little impact on pollution intensity; community incomes have a powerful negative association with pollution intensity. Their findings on community income are especially important, as they suggest a powerful role for informal regulation whether or not formal regulation is in place. The impact of income disparity on inter-county differences in U.S. pollution intensities seems to match the impact in Indonesia. Undoubtedly, this reflects differences in both preference for environmental quality and ability to bring pressure on polluting factories. The fact that such disparities exist in the United States, even for traditionally regulated pollutants, shows that U.S. regulation has not been able to ensure uniform environmental quality for all citizens regardless of income class.Water and Industry,Environmental Economics&Policies,Sanitation and Sewerage,Public Health Promotion,Water Conservation,Energy and Environment,Environmental Economics&Policies,Water and Industry,TF030632-DANISH CTF - FY05 (DAC PART COUNTRIES GNP PER CAPITA BELOW USD 2,500/AL,Sanitation and Sewerage

The industrial pollution projection system

The World Bank's technical assistance work with new environmental protection institutions stresses cost-effective regulation, with market-based pollution control instruments implemented wherever feasible. But few environmental protection institutions can do the benefit-cost analysis needed because they lack data on industrial emissions and abatement costs. For the time being, they must use appropriate estimates. The industrial pollution projection system (IPPS) is being developed as a comprehensive response to this need for estimates. The estimation of IPPS parameters is providing a much clearer, more detailed view of the sources of industrial pollution. The IPPS has been developed to exploit the fact that industrial pollution is heavily affected by the scale of industrial activity, by its sectoral composition, and by the type of process technology used in production. Most developing countries have little or no data on industrial pollution, but many of them have relatively detailed industry-survey information on employment, value added, or output. The IPPS is designed to convert this information to a profile of associated pollutant output for countries, regions, urban areas, or proposed new projects. It operates through sectoral estimates of pollution intensity, or pollution per unit of activity. The IPPS is being developed in two phases. The first prototype has been estimated from a massive U.S. data base developed by the Bank's Policy Research Department, Environment, Infrastructure, and Agriculture Division, in collaboration with the Center for Economic Studies of the U.S. Census Bureau and the U.S. Environmental Protection Agency. This database was created by merging manufacturing census data with Environment Protection Agency data on air, water, and solid waste emissions. It draws on environmental, economic, and geographic information from about 200,000 U.S. factories. The IPPS covers about 1,500 product categories, all operating technologies, and hundreds of pollutants. It can project air, water, or solid waste emissions, and it incorporates a range of risk factors for human toxins and ecotoxic effects. The more ambitious second phase of IPPS development will take into account cross-country and cross-regional variations in relative prices, economic and sectoral policies, and strictness of regulation.Water and Industry,Environmental Economics&Policies,Public Health Promotion,Health Monitoring&Evaluation,Sanitation and Sewerage,Water and Industry,Environmental Economics&Policies,Health Monitoring&Evaluation,Sanitation and Sewerage,TF030632-DANISH CTF - FY05 (DAC PART COUNTRIES GNP PER CAPITA BELOW USD 2,500/AL

Reducing hunger and poverty in Asia: How and when road investments encourage inclusive growth: learning from the Asian Development Bank’s experience

Non-PRIFPRI1; 2020DGO; DSG