How do firms respond to the tighter COD discharge standards? Evidence from the pulp and paper industry in China

The chemical oxygen demand (COD) emissions from the pulp and paper industry in China have declined continuously since the tighter COD discharge standards were implemented in 2008. Using firm-level data from 2003 to 2013, we investigate how China's pulp and paper firms would respond to the tight...

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Bibliographic Details
Published in:Applied economics 2024-07, Vol.56 (31), p.3741-3759
Main Authors: Zhang, Zibin, Ou, Xu, Cai, Wenxin
Format: Article
Language:English
Subjects:
Chemical oxygen demand
Companies
Developing countries
Discharge standard
Economic analysis
Enforcement
Environmental degradation
environmental regulation
Environmental regulations
LDCs
Leadership
Oxygen
Pulp & paper industry
pulp and paper industry
Regulation
Technology adoption
water pollution
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Summary:The chemical oxygen demand (COD) emissions from the pulp and paper industry in China have declined continuously since the tighter COD discharge standards were implemented in 2008. Using firm-level data from 2003 to 2013, we investigate how China's pulp and paper firms would respond to the tighter COD discharge standards with a difference-in-differences design. We find that the tighter COD discharge standards have significant causal effects to induce the pulp and paper firms to reduce their COD emissions primarily through adopting cleaner production. However, the effectiveness of the tighter COD discharge standards depends on monitoring and enforcement activities as well as other regulations accompanying with the tighter COD discharge standards, all of which have become strengthened since China's 11th Five-Year-Plan (FYP, 2006-2010). While strengthened environmental regulations since the 11th FYP are from the top leadership of the Chinese government in order to deal with the increasing environmental degradation, the underlying driving force of the strengthened environmental regulations is from the household demand for better environmental quality as income increases. This study enriches literature not only on firms' responses to environmental regulations in developing countries but also on environmental regulations and technology adoption as well as environmental enforcement and compliance.
ISSN:0003-6846
1466-4283
DOI:10.1080/00036846.2023.2208842