Susmita Dasgupta

Inspections, pollution prices, and environmental performance: evidence from China

In environmental economics, monitoring and enforcement issues have attracted relatively little research effort. Moreover, the bulk of the literature on these issues has been of a theoretical nature. Few have empirically analysed the impact of monitoring and enforcement activities on the environmental performance of polluters. Moreover, all existing studies have been performed in the context of developed countries. A purpose of the current paper is to partially fill this important gap by exploring the impact of both inspections and pollution charges on the environmental performance of polluters in China. While pollution charges represent an important pillar of the Chinese environmental regulatory system, our results indicate that inspections dominate and better explain the environmental performance of industrial polluters.

Incomplete Enforcement of Pollution Regulation: Bargaining Power of Chinese Factories

Only a limited number of papers haveempirically examined the determinants of themonitoring and enforcement activities performedby the environmental regulator. Moreover, mostof these studies have taken place in thecontext of developed countries. In this paper,we empirically examine the determinants of theenforcement of pollution charges in China.More precisely, we seek to identify thecharacteristics which may give firms more orless bargaining power with local environmentalauthorities pertaining to the enforcement(collection) of pollution charges. Firms fromthe private sector appear to have lessbargaining power than state-owned enterprises.Firms facing an adverse financial situationalso appear to have more bargaining power.Finally, we also show that the higher thesocial impact of a firms emissions (asmeasured by the presence of complaints), thesmaller the bargaining power of the firms withlocal environmental authorities.

Policy Reform, Economic Growth and the Digital Divide

Rapid growth of internet use in high-income economies has raised the spectre of a “digital divide” that will marginalize developing countries because they can neither afford internet access nor use it effectively when it is available. Using a new cross-country data set, this paper investigates two proximate determinants of the digital divide: internet intensity (internet subscriptions per telephone mainline); and access to telecom services. Surprisingly, no gap in internet intensity was found. When differences in urbanization and competition policy are controlled for, low-income countries have intensities as high as those of industrial countries. While income does not seem to matter in this context, competition policy matters a great deal. Low-income countries with high World Bank ratings for competition policy have significantly higher internet intensities. The papers finding on internet intensity implies that the digital divide is not really new, but reflects a persistent gap in the availability of mainline telephone services. After identifying mobile telephones as a promising new platform for internet access, the paper uses panel data to study the determinants of mobile telephone diffusion during the past decade. The results show that income explains part of the diffusion lag for the poor countries, but they also highlight the critical role of policy. Developing countries whose policies promote economic growth and private sector competition have experienced much more rapid diffusion of mobile phone service. Simulations based on the econometric results suggest that feasible reforms could sharply narrow the digital divide during the next decade for many countries in Africa, Asia and Latin America.

Surviving success : policy reform and the future of industrial pollution in China

Chinas recent industrial growth, a remarkable success story, has been clouded by hundreds of thousands of premature deaths and incidents of serious respiratory illness caused by exposure to industrial air pollution. Seriously contaminated by industrial discharges, many of Chinas waterways are largely unfit for direct human use. This damage could be substantially reduced at modest cost. Industrial reform combined with stricter environmental regulation has reduced organic water pollution in many areas and has curbed the growth of air pollution. But much higher levels of emissions controls (of particulates and sulfur dioxide) are warranted in Chinas polluted cities. For the cost-benefit analysis that led to this conclusion, the authors developed three scenarios projecting pollution damage under varying assumptions about future policies. Their findings are: Even if regulation is not tightened further, continued economic reform should have a powerful effect on pollution intensity. Organic water pollution will stabilize in many areas and actually decline in some. Air pollution will continue growing in most areas but at a much slower pace than industrial output. The cost of inaction would be high--most of Chinas waterways will remain heavily polluted, and many thousands of people will die or suffer serious respiratory damage. Continuing current trends in tightened regulation for water pollution will lead to sharp improvements; adopting an economically feasible policy of much stricter regulation will restore the health of many waterways. The stakes are even higher for air pollution because regulatory enforcement has weakened in many areas in the past five years. Reversing that trend will save many lives at extremely modest cost. Chinas National Environmental Protection Agency (NEPA) has recommended a tenfold increase in the air pollution levy; adopting NEPAs very conservative recommendation would produce a major turnaround in most cities. For representative Chinese cities, a fiftyfold increase in the levy is probably warranted economically. To be cost-effective, heavy sources of particulate and sulfur dioxide emissions should be targeted for abatement. Reducing emissions from large private plants is so cheap that only significant abatement makes sense -- at least 70 percent abatement of sulfur dioxide particulates and even greater abatement of particulates in large urban industrial facilities.

Sea-Level Rise and Storm Surges : A Comparative Analysis of Impacts in Developing Countries

An increase in sea surface temperature is evident at all latitudes and in all oceans. The current understanding is that ocean warming plays a major role in intensified cyclone activity and heightened storm surges. The vulnerability of coastlines to intensified storm surges can be ascertained by overlaying Geographic Information System information with data on land, population density, agriculture, urban extent, major cities, wetlands, and gross domestic product for inundation zones likely to experience more intense storms and a 1 meter sea-level rise. The results show severe impacts are likely to be limited to a relatively small number of countries and a cluster of large cities at the low end of the international income distribution.

Sea-Level Rise and Storm Surges: High Stakes for a Small Number of Developing Countries

As the climate changes during the 21st century, larger cyclonic storm surges and growing populations may collide in disasters of unprecedented size. As conditions worsen, variations in coastal morphology will magnify the effects in some areas, while largely insulating others. In this article, we explore the implications for 31 developing countries and 393 of their cyclone-vulnerable coastal cities with populations greater than 100,000. Combining the most recent scientific and demographic information, we estimate the future impact of climate change on storm surges that will strike coastal populations, economies, and ecosystems. We focus on the distribution of heightened impacts, because we believe that greater knowledge of their probable variation will be useful for local and national planners, as well as international donors. Our results suggest gross inequality in the heightened impact of future disasters, with 50% of the burden falling on the residents of 10 Asian cities and over 40% falling on Manila, Karachi, and Jakarta alone. In light of these huge asymmetries, we believe that careful targeting of international assistance will be essential for the effective and equitable allocation of resources for coastal protection and disaster prevention.

Vulnerability of Bangladesh to Cyclones in a Changing Climate: Potential Damages and Adaptation Cost

This paper integrates information on climate change, hydrodynamic models, and geographic overlays to assess the vulnerability of coastal areas in Bangladesh to larger storm surges and sea-level rise by 2050. The approach identifies polders (diked areas), coastal populations, settlements, infrastructure, and economic activity at risk of inundation, and estimates the cost of damage versus the cost of several adaptation measures. A 27-centimeter sea-level rise and 10 percent intensification of wind speed from global warming suggests the vulnerable zone increases in size by 69 percent given a +3-meter inundation depth and by 14 percent given a +1-meter inundation depth. At present, Bangladesh has 123 polders, an early warning and evacuation system, and more than 2,400 emergency shelters to protect coastal inhabitants from tidal waves and storm surges. However, in a changing climate, it is estimated that 59 of the 123 polders would be overtopped during storm surges and another 5,500 cyclone shelters (each with the capacity of 1,600 people) to safeguard the population would be needed. Investments including strengthening polders, foreshore afforestation, additional multi-purpose cyclone shelters, cyclone-resistant private housing, and further strengthening of the early warning and evacuation system would cost more than

Japanese multinationals in Asia: Drivers and attractors

2.4 billion with an annual recurrent cost of more than

Cyclones in a Changing Climate : The Case of Bangladesh

50 million. However, a conservative damage estimate suggests that the incremental cost of adapting to these climate change related risks by 2050 is small compared with the potential damage in the absence of adaptation measures.

Bending the Rules: Discretionary Pollution Control in China

This paper studies the choice by Japanese multinationals of Asia and of specific Asian countries as investment destinations. High costs in Japan exert a general push towards investing in Asia. Unlike investment in the US and Europe, trade barriers do not drive Asian investment. While domestic markets of host countries are important, conditions for efficient production in the host country also determine its attractiveness. In Asia, firms have looked for industrially literate workers, though the new Japanese investment is being guided more by low wages. Japanese investors also stake out early positions in growing markets. The inability to repatriate earnings is the strongest disincentive to Japanese investment. A favourable foreign direct investment policy is desirable but its importance declines as a firm gains experience in a country.