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Published in: Environmental Management 2/2022

19-05-2022

Policy Implementation Inconsistency and Emission Leakage: Evidence from The Closure of Polluting Firms

Authors: Xurui Wang, Mengdi Liu, BeiBei Liu, Bing Zhang

Published in: Environmental Management | Issue 2/2022

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Abstract

Public policies often fail to address the unintended behavior of regulated firms and are therefore inconsistent in their implementation, resulting in ineffectiveness. In the process of environmental policy, policy implementation inconsistencies also exist, which is known as emission leakage. Existing studies on the topic focus more on spatial dimension and less attention to time dimension. The reasons for emission leakage over time are two: regulatory laxness and inefficiencies. In this study, we examine whether emission leakage occurs during enterprises’ end-of-life cycles. Based on unique high-frequency facility-level monitoring data, we construct a difference-in-differences (DID) model to investigate differences in environmental performance between hazardous chemical production firms in the process of closing and those in the same industry within 20 kilometers. This study finds no emission leakage problem in the processes of relocation and closure, and the concentration of chemical oxygen demand (COD) discharged declines by 28.53 percent. This result is mainly due to top-down regulatory requirements. Nevertheless, policymakers should remain aware of emission leakage when formulating environmental policies and create more substantial supervision to prevent potential leakage.
Appendix
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Footnotes
1
In this study, we focus on relocation and closure of these two types of firms, and these two types of firms can be distinguished by the list released by the government, so we refer to this policy as “the relocation and closure policy” for short.
 
2
In this study, we focus on relocation and closure of these two types of firms, and these two types of firms can be distinguished by the list released by the government, so we refer to this policy as “the relocation and closure policy” for short.
 
4
For example, the acceptance results of the relocation and reconstruction work in Liaoyang City, Liaoning Province, released on September 25, 2020, show that the work has been completed effectively. For the selection scheme, see http://​www.​liaoyang.​gov.​cn/​html/​LY/​202012/​160739714827730.​html.
 
5
See Appendix for the documents.
 
6
For example, in January 2018, The Shanxi Provincial Government issued the Shanxi Provincial Government Concerning the Urban Population Concentration Areas of Dangerous Chemicals Production Firms Transferring Work Plan Notice, which formulated a work plan and a list of hazardous chemical production firms that need to be relocated, reformed on site, shut down and quit in Shanxi Province. For the selection scheme, see http://​www.​shaanxi.​gov.​cn/​zfxxgk/​fdzdgknr/​zcwj/​szfbgtwj/​szbh/​201901/​t20190109_​1668103.​html.
 
7
For example, on May 20, 2020, the national special working group for the relocation and reconstruction of hazardous chemical production firms carried out field investigation and evaluation on the hazardous chemical production firms that had been relocated and renovated in Zhengzhou. For related reports, see http://​www.​liaoyang.​gov.​cn/​html/​LY/​202012/​160739714827730.​html.
 
10
For example, on June 12, 2020, Harbin held a promotion meeting on relocation and transformation of hazardous chemical production enterprises in the city. At the meeting, the relevant departments of the relocation enterprise and its place shall report on the relocation and transformation and the development of the acceptance work. For related reports, see http://​www.​harbin.​gov.​cn/​art/​2020/​6/​17/​art_​4908_​919855.​html.
 
11
On June 4, 2020, the deputy mayor of Zigong city inspected the progress of the relocated enterprises. For related reports, see http://​www.​zg.​gov.​cn/​web/​shbj/​-15/​-/​articles/​11923854.​shtml.
 
12
The specific operation is to remove the data less than 1/5 of the annual median pollutant concentration and more than 5 times of the annual median pollutant concentration.
 
13
Since we use a semilog model, we use Equation eβ-1 to calculate the elasticity of all models.
 
14
For example, Arrive in December 2020, Yichun City Industry and Information Technology has launched a safe and environmentally friendly hidden danger investigation of 2 households listed in the Relief Co., Ltd., Jianlong West Steel. For related reports, see https://​baijiahao.​baidu.​com/​s?​id=​1718731753618946​305&​wfr=​spider&​for=​pc.
 
Literature
go back to reference Zhang W (2020) Emissions from Coal-Fired Power Plant Retirements(Working paper). University of Arizona Zhang W (2020) Emissions from Coal-Fired Power Plant Retirements(Working paper). University of Arizona
Metadata
Title
Policy Implementation Inconsistency and Emission Leakage: Evidence from The Closure of Polluting Firms
Authors
Xurui Wang
Mengdi Liu
BeiBei Liu
Bing Zhang
Publication date
19-05-2022
Publisher
Springer US
Published in
Environmental Management / Issue 2/2022
Print ISSN: 0364-152X
Electronic ISSN: 1432-1009
DOI
https://doi.org/10.1007/s00267-022-01668-x

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