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This paper examines the impact of changes in the stringency of environmental regulations on productivity growth. We exploit several data sources, including the OECD Environmental Policy Stringency Index and balance sheet information from ORBIS and iBACH, to test the Porter hypothesis, according to which firms' productivity can benefit from more stringent environmental policies. We estimate the regulatory impact over a five-year horizon using panel local projections. To identify the direction of the effects, we estimate CO 2 equivalent emissions for all firms in our sample using a machine learning algorithm. As suggested by the country-level analysis and confirmed by the firm-level analysis, policy tightening negatively affects productivity growth of high-polluting firms and to a larger extent than that of their low-polluting peers. Hence, we do not find support for the Porter hypothesis in general. However, not all policies have the same impact – non-market based policies are the most detrimental to productivity growth – and not all highly polluting firms are affected in the same way – the negative impact is mitigated for large firms, which may benefit from easier access to finance and greater innovativeness. [ABSTRACT FROM AUTHOR]

This paper examines the investment incentives of market-based regulation, focusing on the technology characteristics that different regulatory schemes tend to incentivize. The firms' technology choice is socially optimal if and only if the aggregate emission allowance supply is completely inelastic. Furthermore, in the presence of uncertainty, elastic emission allowance supply, and strictly convex environmental damage, it is optimal to tax investments in technologies that induce a large variance in emissions. Lastly, price elastic supply of emission allowances may either increase or decrease the volatility in the product market, depending on the risk environment the firms face. The results indicate that introduction of permit price-stabilizing measures in an emission trading system will come at the cost of suboptimal technology investments, and may also lead to increased fluctuations in product prices. • I examine investment and technology characteristics induced by environmental regulation. • Firms' technology choice is suboptimal unless the cap on emissions is exogenous. • It is optimal to tax investment in technologies that induce large variance in aggregate emissions. • Elastic emission allowance supply can impact product market volatility. [ABSTRACT FROM AUTHOR]

Rapid developments in environmental infrastructure have contributed to significant improvements in green total factor productivity, but further investigation is required to provide a detailed assessment to understand the policy mechanisms involved. This paper analyzes environmental progress in China through MMQR, CCEMG, and AMG as empirical strategies for 30 provinces in China. Our empirical results reveal that energy optimization through renewable energy is the most effective channel to improve green total factor productivity, though it is not the only available option. Since environmental regulations, infrastructure development, and green technology innovation also directly impact energy efficiency, adopting these within policy channels will positively impact environmental sustainability. Our empirical approach helps suggest novel environmental policy suggestions. In particular, policymakers must introduce structural changes within energy developments to foster renewable energy. Furthermore, China must increase environmental spending to upgrade its energy infrastructure further and solve ecological issues. These insights offer valuable policy guidance for decision-makers in China and globally, aiming to foster economic and environmental sustainability and achieve zero-carbon transition goals. • The current study analyses the role of green factor productivity in zero carbon transition. • We use 30 chinese provincial datasets from 2005 to 2020. • Energy transition is the most effective channel to improve green total factor productivity. [ABSTRACT FROM AUTHOR]

Green innovation (GI) is increasingly recognised as an effective strategy for tackling climate change, mitigating environmental issues, and promoting sustainable development. Using panel data of the Chinese listed firms from 2007 to 2019, this study adopts the difference-in-differences approach to assess the impact of the green finance policy (GFP) initiated by the Chinese government in 2012 on the green innovation performance of firms. The findings reveal that the GFP significantly boosts the green innovation performance of heavily polluting enterprises (HPEs). Notably, this effect is more pronounced in state-owned enterprises and firms with high dependence on external finance. Compared with penalty-based regulations, incentive-based and voluntary environmental regulations demonstrate more significant moderating effects on the relationship between the GFP and green innovation performance for HPEs. We also identify improved efficiency in the usage of green investments as a potential mechanism through which the GFP enhances the green innovation performance of HPEs. Further comparative analysis shows that green enterprises can achieve simultaneous improvement in both the quality and quantity of green innovation, whereas HPEs predominantly exhibit enhancements in innovation quantity. To maximise the GFP's positive effects, it is recommended to facilitate more targeted bank lending towards HPEs to support their structural transformation. Additionally, the coordinated deployment of diverse environmental policy instruments is advised to exploit their synergistic effects. • This paper confirms the positive relationship between Green Finance Policy (GFP) and the green innovation. • We develop a novel machine learning approach to enhance the accuracy of variable measurements. • Firms with different ownership structure and external finance reliance are impacted differently by the GFP. • Both incentive-based and voluntary environmental regulations have positive moderation effects. • GFP can improve the green innovation by enhancing the green investment efficiency. [ABSTRACT FROM AUTHOR]

The Chinese government has attached great importance to pollution emission reduction. Since public environmental preference plays an important role in curbing polluting emissions by companies, this paper aims to explore the impact of public environmental preference and government environmental regulation on corporate pollution emissions. The coordinating role of environmental preference in the implementation of environmental regulatory policies is analyzed using pollution emission data of Chinese enterprises. The results show that both environmental preference and environmental regulation have significant inhibitory effects on corporate pollution emissions. The inhibitory effects are achieved by promoting the green technology progress. With high environmental preference, environmental regulation can effectively curb corporate emissions. This paper is helpful for policy makers to formulate ecological and environmental protection policies and cultivate public environmental preferences. • Environmental preference has inhibitory effect on corporate pollution emissions. • Promoting green technology progress helps inhibiting corporate polluting emissions. • With high environmental preference, environmental regulation can curb emissions. [ABSTRACT FROM AUTHOR]

Geopolitical risks and environmental policy have become increasingly important in the European Union (EU), which is committed to tackling climate change and protecting the environment. However, geopolitical risks can undermine its environmental policy objectives. Thus, the study evaluates the relationship between geopolitical risks and environmental policy in nineteen EU countries from 1994 to 2020 through panel bootstrap Granger causality. The results show that geopolitical risks significantly influence environmental policy in Denmark, Estonia, Finland, France, Germany, Luxembourg, and Romania. On the other hand, the findings reveal that environmental policy causes geopolitical risks only in Latvia, while there is no relationship in the remaining countries. Therefore, policymakers must develop resilience to geopolitical risks, promote renewable energy, strengthen environmental regulations, and address social and economic implications to reduce environmental policy vulnerability to geopolitical risks. • Geopolitical risks affect ecological policies in Denmark, Estonia, Finland, France, Germany, Luxembourg, and Romania. • Environmental policy causes geopolitical risks only in Latvia. • Policymakers, promote renewables, enhance regulations to cut vulnerability to geopolitical risks. [ABSTRACT FROM AUTHOR]

Based on the unique perspective of local environmental regulations promulgated in Chinese prefecture-level cities from 2000 to 2018, this paper examines the impact of urban environmental legislation on green total factor energy efficiency (GTFEE). The results show that implementing environmental legislation significantly improves local GTFEE , with comprehensive protection regulations contributing to local energy efficiency improvements, while the impact of pollution prevention regulations is insignificant. This conclusion remains robust to multiple scenarios. Potential mechanisms through which environmental legislation can guide urban green transition include the industrial upgrading effect represented by "clean industry development" and "polluting industry exit", as well as the technical innovation effect achieved through "new technology generation" and "old technology upgrading". Furthermore, environmental legislation with a higher degree of regulatory effectiveness has a greater potential for energy saving. Environmental legislation has a more significant impact on improving GTFEE in cities in non-old industrial bases, with less frequent turnover of officials, and in central and western regions in China. This study evaluates the positive impact of urban environmental legislation on GTFEE , aiming to advancing the rule of law in local environmental pollution governance and thereby promote urban green transition. • Use a Difference-in-Differences model to explore the effect of urban environmental legislation. • Environmental legislation guides urban green transition development. • The impact of heterogeneous urban environmental regulations on green transition development. • Industrial upgrading and Technical innovation have positive mediating roles. • Environmental legislation policy has city attributes, official turnover and location heterogeneity. [ABSTRACT FROM AUTHOR]

This empirical study examines the impact of environmental regulations on carbon productivity under varying conditions using panel data from Chinese provinces from 2011 to 2019. Prior research has reported inconsistent results regarding the relationships between these variables. We developed a spatial Durbin model (SDM) and tested the non-linear effects of environmental regulation on carbon productivity from a spatial linkage perspective. The results demonstrate a U-shaped curve representing the local-neighborhood effect of environmental regulations on carbon productivity. This curve is further dissected into two components: the average direct effect (ADE) and the average indirect effect (AIE). Furthermore, the findings indicate that green technology progress and pollution transfer act as moderating factors in shaping the U-shaped curve. Green technological progress has steepened the U-shape curve, whereas pollution transfer has flattened it. Based on these findings, we propose three recommendations for the formulation of environmental regulation policies. • We examine the effects of environmental regulations on carbon productivity. • Different conditions are compared and considered. • The local neighborhood effect represents a U-shaped curve. • Moderating roles of green technology progress and pollution transfer are explored. [ABSTRACT FROM AUTHOR]

Anthropogenic global warming strategies on carbon mitigation are driven by encouraging green innovation and using carbon taxes, yet an empirical model to validate this is non-existing. Moreover, the existing stochastic effects by regression on population, wealth, and technology (STIRPAT) model has been found to lack policy tools on taxes and institutions that cut carbon emissions. This study amends the STIRPAT model with environmental technology, environmental taxes, and strong institutional frameworks to create a new model STIRPART(stochastic impacts by regression on population, affluence, regulation, and technology) to understand the factors impacting carbon pollution using the emerging 7 economies. Using data from 2000 to 2020, the Driscoll-Kraay fixed effects are employed in this analysis to conduct evidential tests of the impacts of environmental policies, eco-friendly innovations, and strong institutions. The outcomes indicate that environmental technology, environmental taxation, and institution quality decrease E7's carbon emissions by 0.170%, 0.080%, and 0.016%, respectively. It is recommended that E7 policymakers should adopt the STIRPART postulate as the theoretical basis for policies favoring environmental sustainability. The key contribution is the amendment of the STIRPAT model and the enhancement of the market-based mechanisms, such as patents, strong institutions, and carbon taxes, to enable environmental policy to be carried out sustainably and cost-effectively. • The research analyzed how E7 economies reduced carbon emissions from 2000 to 2020 using environmental technology, environmental taxes, and robust institutional frameworks. • An expanded STIRPART model was conceptualized to assess factors impacting carbon pollution in E7 economies. • STIRPART model represents a pivotal contribution to carbon mitigation strategies in emerging economies. • Driscoll-Kraay fixed effects and method of moment quantile used to conduct evidential tests on impacts of environmental policies, eco-friendly innovations, and strong institutions. • Improvement of market-based mechanisms, such as patents, strong institutions, and carbon taxes, is necessary for sustainable and cost-effective environmental policy. [ABSTRACT FROM AUTHOR]

This paper presents a novel method to quantify the market equilibrium impacts of tighter environmental policies. The approach is taken to evaluate the welfare effects of emerging environmental regulations to protect the biodiversity of river ecosystems that put pressure on reducing hydropower generation capacity. A dataset of 129 million bids in the Nordic electricity market is used to calculate how small reductions in hydropower capacity change market outcomes and surpluses hour-by-hour for the years 2011–2022. Reaching the EU Biodiversity Strategy target of 2030 is estimated to reduce 56 MW of hydropower capacity in Finland. Such a change would lead to quantifiable welfare losses of €62 million over time, not counting environmental benefits. Notably, the producer surplus increases by €318 million over time through electricity market price changes, suggesting that instead of lobbying against biodiversity enhancing regulation, agreeing to an industry-wide implementation could benefit both the environment and the firms. Yet the fact that consumer costs increase more than the mere implementation cost reads as a sign of caution when tighter biodiversity policies are introduced. [ABSTRACT FROM AUTHOR]

Combining time variations, cross-province variations in policy intensity, and variations in pollution intensity across industries, we estimate the impact of environmental regulation on firm exports. We find that in more pollution-intensive industries, stricter environmental regulation reduces both the probability that a firm will export and the volume of exports. Heterogeneous tests show that the impact is smaller for SOE firms and for firms located in the central and western part of China. We also find that the reduced probability that a firm will export is driven by a decline in non-exporters entering the export market. [ABSTRACT FROM AUTHOR]

We develop a two-good general equilibrium model of a small open economy to decompose the effect of a country's unilateral strengthening of environmental policy on pollution emissions in the rest of the world, known as emissions leakage. We show analytically and numerically that the level of emissions leakage depends on the level of trade friction in the service sector. In the model, production in the manufacturing sector is associated with pollution emissions, and production in the service sector is clean. In a special case with free trade in manufacturing and no trade in services, no leakage occurs. Allowing for trade in services, we solve for the relationship between trade frictions in the service sector and leakage. At lower levels of service sector's trade friction, leakage from a small strengthening of environmental regulation decreases (increases) if services are imported (exported). Finally, we simulate the model, calibrating the to the Canadian economy to compare these effects’ relative sizes over a range of plausible parameter values. Leakage is about 18% lower when using trade friction levels estimated from the literature rather than assuming no trade friction in services. [ABSTRACT FROM AUTHOR]

In this literature review based paper we explored the concept of exclusion of local communities from accessing resources in forest protected areas (FPAs) in Zimbabwe. We discussed the colonial and post-colonial forms, causes and mechanisms of exclusion and their social, economic and ecological outcomes. We examined the range of powers embodied in and exercised through various mechanisms, processes and social relations and their impact on local communities' access to FPA resources and associated benefits along the historical trajectory of forest governance in Zimbabwe. Results showed that the forms and extent of exclusion changed over time in tandem with the shifting political and economic landscape. During the colonial period, it was total exclusion whereby people were evicted from forest land as well as being denied access to basic resources for their livelihoods. Local communities' access to low value FPA resources improved during the post-colonial period but access to high value resources like commercial timber as well as sharing income benefits derived from FPA commercial activities remained a pipe dream. Regulation, legitimation, force and markets constituted the mixture of the power elements that FPA governing authorities used to exclude local communities. These powers remained intact despite attempts at collaborative governance in the 1990s. However, from the year 2000, local communities expressed their dissatisfaction with the centralised exclusionary governance system by invading the FPAs rendering them ungovernable. There is therefore a need for policy reform within the FPA sector to improve the current dire situation. [ABSTRACT FROM AUTHOR]

The Chinese government has made great efforts in air pollutant reduction and carried out strict regulation policies. Since numerous air pollutants and CO 2 tend to have the same root, source, and process, recent studies argue that environmental regulation may also contribute to reducing carbon emissions. To investigate how various types of environmental regulations affect carbon emissions reduction, this paper constructs the spatial Durbin model and panel threshold model based on provincial panel data in China during 2003–2019. The main findings are as follows: First, China's net carbon emissions show a decreasing trend from east to west, displaying significant spatial agglomeration characteristics. Then, formal and informal environmental regulations have inverted U-shaped impacts on net carbon emissions. The "green paradox" and "reverse emission reduction" effects come into play at different stages. Finally, the threshold model reveals that with the improvement of regional technological innovation levels, the carbon-reducing effect of environmental regulation will increasingly come to the fore. These research findings are conducive to providing theoretical guidance for government to formulate and implement environmental regulation policies rationally. • Carbon sink effect is considered in the carbon emissions assessment framework. • The spatial spillover and threshold effects of environmental regulation is studied. • Environmental regulation has an inverted U-shaped impact on net carbon emissions. • Technological innovation level exerts a threshold effect between them. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of changes in environmental policy stringency on industry- and firm-level productivity growth in a panel of OECD countries. To test the strong version of the Porter Hypothesis (PH), we extend a neo-Schumpeterian productivity model to allow for effects of environmental policies. We use a new environmental policy stringency (EPS) index and let the effect of countries׳ environmental policies vary with the pollution intensity of the industry and with the countries’ and firms’ technological advancement. A tightening of environmental policy is associated with a short-term increase in industry-level productivity growth in the most technologically-advanced countries. This effect diminishes with the distance to the global productivity frontier, eventually becoming insignificant. For the average firm, no evidence of PH is found. However, the most productive firms see a temporary boost in productivity growth, while the less productive ones experience a productivity slowdown. [ABSTRACT FROM AUTHOR]

This paper examines the drivers of distribution of pollution-intensive enterprises (PIEs) at the intraurban level that are less studied. Employing the complete spatial database of PIEs obtained from the National Economic Census of 2004, 2008, and 2013, the paper analyses the spatial restructuring of PIEs within Foshan, China, a typical manufacturing city in transition. We find that the changing role of environmental regulation induced by the environmental policy regime transformation has resulted in the siting strategy shift of PIEs, and both the 'Pollution Haven Hypothesis' and the 'Porter Hypothesis' have been overly simplified in the research conducted at the regional or global level. Based on the Foshan case, we further conceptualize the pattern of spatial restructuring of PIEs that would help to understand the fast green economy transition taking place in Chinese cities, followed by some policy and research implications. • The relocation and drivers of polluting firms at a local level are studied. • The environmental policy regime shift leads to the siting strategy shift of firms. • Polluting firms initially seek a pollution haven before 2008. • New firms after 2008 site in areas with strict environmental regulation. • The local government motivation is more important in the Chinese context. [ABSTRACT FROM AUTHOR]

Carbon dioxide removal (CDR) moves atmospheric carbon to geological or land-based sinks. In a first-best setting, the optimal use of CDR is achieved by a removal subsidy that equals the optimal carbon tax and marginal damages. We derive second-best policy rules for CDR subsidies and carbon taxes when no global carbon price exists but a national government implements a unilateral climate policy. We find that the optimal carbon tax differs from an optimal CDR subsidy because of carbon leakage and a balance of resource trade effect. First, the optimal removal subsidy tends to be larger than the carbon tax because of lower supply-side leakage on fossil resource markets. Second, net carbon exporters exacerbate this wedge to increase producer surplus of their carbon resource producers, implying even larger removal subsidies. Third, net carbon importers may set their removal subsidy even below their carbon tax when marginal environmental damages are small, to appropriate producer surplus from carbon exporters. [ABSTRACT FROM AUTHOR]

This paper seeks to better understand the persistent environmental problems in urbanizing economies. We examine the effectiveness of environmental policy in an economy with agglomeration economies and endogenous firm relocation and entry/exit. We show that, although environmental regulation is effective in the short run, in the presence of agglomeration economies, spatial relocation of firms in response to environmental regulation can undermine the effectiveness of regulations, rendering them less effective or even ineffective. In fact, we show that regulation might even be counter-productive, i.e., exacerbate environmental problems, at certain stages of development. We present initial empirical evidence in the context of water pollution in China that demonstrates the importance of agglomeration economies in determining the impacts of environmental regulation. [ABSTRACT FROM AUTHOR]

How to choose environmental policy instruments within a clearly defined scope of the market mechanism and government intervention will profoundly affect the policy effectiveness. Through a systematic review of 111 representative literature, this paper traces the theoretical development of environmental policy instruments, empirical analyses based on the CGE (Computable General Equilibrium) model, and globally practical experience. We find that the reflections on environmental policy instruments have shifted from command-based to market-based, from trade-offs between quantity-based and price-based instruments within the scope of market-based instruments to combining both, and finally a reasonable allocation of both command-based and market-based instruments. The CGE model promotes the shift, deepens the theory, and accelerates the transformation from theoretical thinking to practical application. By providing approaches to recognize and measure the overall economic costs of environmental policies, the CGE model plays an important role in validating efficiency theories, identifying efficiency losses, and amending policy instruments. It also promotes the implementation of environmental tools through region-pertinent settings and simulations. Based on reflections and discussions upon existing literature, we propose that the market should play a dominant role in allocating resources to obtain long-term environmental goals with corresponding environmental regulations as supplementary; under the circumstances with market efficiency losses, command-based instruments should be employed to cope with market failures. The results in this paper can facilitate the expansion of the environmental policy theory and also assist governments with better selection and formulation of environmental policy instruments relying on a solid theoretical basis and rational practical approaches. • Theoretical development of environmental policy instruments and empirical analyses based on the CGE model are systematically explored. • The preference for policy tools shifts to market-based instruments and evolves into a combination of quantity- and price-based instruments. • The CGE model promotes theoretical verification, and facilitates policy formulation and implementation. • The market should play a dominant role in allocating resources to obtain long-term environmental goals. • Command-based instruments should be employed to complement market tools when the market efficiency loss is substantial. [ABSTRACT FROM AUTHOR]

A comprehensive understanding of the effect of environmental regulation policy synergy on carbon emissions is essential for the design and decision-making of the other policy combinations. In this paper, the panel data from 30 provinces in China during 2000–2019 are used as samples to investigate the heterogeneity of different policy combinations and compare the differences using a Bayesian non-parametric generalized additive quantile method. The research results imply that the environmental regulation policy synergy has a significant heterogeneous effect on carbon emissions on different levels. Specifically, the effect of environmental regulation policy synergy on carbon emissions has an inverted U-shape trend at the low quintiles, i.e., before the turning point, it shows a "green paradox" effect, and after the turning point, it shows an "emission reduction" effect. However, the effect of environmental regulation policy synergy on carbon emissions shows a significant N-shape trend at the high quintiles, i.e., before the second turning point, it shows an "emission reduction" effect, and after the second turning point, it shows a "green paradox" effect. Moreover, the effect of environmental regulation policy combinations on carbon emissions reduction has been found to vary significantly across regions. • Effect of environmental regulation policy synergy on carbon emissions is explored. • The mediating role of industrial structure is considered. • The effect of ERPS on CE has an inverted U-shape trend at the low quintiles, which shows a significant N-shape trend at the high quintiles. • Significant difference in the efficiency for implementation of ERPS in regions with different levels of CE. [ABSTRACT FROM AUTHOR]

This paper explores how cross-country differences in environmental regulatory stringency among member states of the world's largest multinational cap-and-trade system, the European Union Emission Trading Scheme (EU ETS), influenced the FDI location choice of listed multinationals (MNEs) regulated by the environmental policy. After controlling for other country characteristics driving FDI location choice, we find that the likelihood of EU ETS-covered MNEs locating new FDI projects in less environmentally stringent member states strongly depends on firm- and industry-specific environmental characteristics during the system's first two phases. Our results are robust to different measures of environmental stringency and provide evidence for the existence of an intra-regional pollution haven effect (PHE). This investment behavior by MNEs is, moreover, only found in the industries least compensated for the environmental costs induced by the policy. This suggests that the EU inadvertently promoted an intra-regional PHE not only by allowing cross-country variation in environmental stringency but also by overly focusing on and compensating for external carbon leakage risk. Our conclusions have major implications for countries and regions currently establishing or implementing an emissions trading system. • We examine the largest multinational cap-and-trade scheme in the world, the EU ETS. • Current research on the pollution haven effect focuses on FDI outside the EU ETS. • We explore intra-EU ETS differences in environmental stringency among member states. • Using a conditional logit model, we find evidence of an intra-regional PHE. • PHE driven by most polluting firms in industries with limited strategic flexibility. [ABSTRACT FROM AUTHOR]

The staggering rise in global temperature and abrupt change of climate are the responses of nature alerting humanity to limit the emissions of hazardous gases and adopt environmentally-benign life style. The present study explores empirically whether any changes in environmental policy stringency (EPSI), political risk (PR), and the interaction term of EPSI*PR result in any alteration of consumption-based carbon emissions (CBCE) of the 24 advanced OECD economies over the period of 1990–2020. Prior to the empirical estimations, various diagnostic tests are employed. The empirical techniques include, panel cointegration check, Cross-sectional Augmented Autoregressive Distributed Lags (CS-ARDL), and Dumitrescu & Hurlin panel causality test. The findings confirm that imports, gross domestic product, and stringency of environment policies activate CBCE in short-run. Whereas, a unit improvement in political risk and its interaction with environmental policy stringency give rise to 0.231 MtCO 2 of CBCE in long run. Interestingly, the squared term of environmental policy stringency effectively tackles such emissions. Based on the findings, we conclude that the present environment related policies of OECD member states does not effectively limit CBCE. In order to achieve genuine emissions reduction goals, the selected nations should restructure their environment related policies by prioritizing increments in environmental policy stringency along with minimizing the risks involved in the political system. • The present environmental policies of OECD nations are not targeting consumption-based emissions. • The Lower the political risk, the minor the consumption-based carbon emissions. • Lower political risk along with efficient environmental policies curb such emissions. • Interestingly, augmenting the current environmental policies tackles the emissions. [ABSTRACT FROM AUTHOR]

We study environmental regulation and its role for trade in China. Specifically, we assess the effectiveness of an environmental policy in China that introduced stricter regulations on sulfur dioxide (SO 2 ) emissions in targeted cities. To identify the causal effect of this policy on exports, we use sectoral export data for a panel of Chinese cities and exploit variations in exports between cities and sectors, over time, and, in a second step, between firm types. We find a relative fall in sectoral exports in targeted cities after the implementation of the policy, which is sharper the more polluting the industry. Further, we find that the observed effect is mainly driven by privately owned firms, whereas exports of state-owned firms seem to be unaffected by the new policy. This finding is consistent with the preferential political treatment of state-owned firms in China. [ABSTRACT FROM AUTHOR]

Abstract: Centralized collection and disposal is an integral component of waste management strategies for many solid and liquid wastes, and carbon capture and storage is currently being considered for gaseous waste. In this paper we show how collective waste disposal systems introduce essential changes in the design of optimal environmental policy. Absent collective disposal, an optimal environmental policy imposes relatively stringent regulations on polluters in regions where local environmental damage functions are “high”; however, under collective waste disposal, the optimal environmental policy level increases monotonically over distance from the disposal site, and this is true irrespective of the degree of spatial heterogeneity in local environmental damage functions. We characterize the optimal spatial pattern of environmental policy levels under collective waste disposal and identify optimal membership size for waste disposal networks comprised of homogeneous producers. [Copyright &y& Elsevier]

Abstract: Groundwater pumping can reduce the flow of surface water in nearby streams. In the United States, recent awareness of this externality has led to intra- and inter-state conflict and rapidly-changing water management policies and institutions. Although the marginal damage of groundwater use on stream flows depends crucially on the location of pumping relative to streams, current regulations are generally uniform over space. We use a population data set of irrigation wells in the Nebraska portion of the Republican River Basin to analyze whether adopting spatially differentiated groundwater pumping regulations leads to significant reductions in farmer abatement costs and costs from damage to streams. We find that regulators can generate most of the potential savings in total social costs without accounting for spatial heterogeneity. However, if regulators need to increase the protection of streams significantly from current levels, spatially differentiated policies will yield sizable cost savings. [Copyright &y& Elsevier]

The effect of environmental regulations on the nexus between financial development and biased technological innovation is a prerequisite for optimizing systems of environmental and financial policies to gain sustainable development goals (SDGs) in emerging markets. Drawing on China's city-level data from 2003 to 2018, we established econometric models and obtained the following empirical results. Financial development (FD) can promote energy- and environmental-biased technological progress, but, owing to the inverted U-shaped relationship, economic development, and resource endowment, the impact that FD has on biased technological progress is heterogeneous; unreasonable FD will also hinder green technological progress. Threshold model shows that with the improvement of environmental regulation, the impact of energy- and environmental-biased technological progress is also increasing. The development of green finance under SDGs is an important driving force in green technological progress. Finally, we offer suggestions to optimize environmental and financial policymaking and implementation from a government intervention perspective. [Display omitted] • It is important to optimize environmental and financial policies to gain SDGs. • Environmental policies are affected by technological and financial developments. • Financial development (FD) promotes energy- and environmental-technological growth. • Due to an inverted U-shaped relationship biased FD hinders green technology growth. • Green finance development under SDGs will drive green technological progress. [ABSTRACT FROM AUTHOR]

Abstract: We develop a theoretical model identifying channels through which trade impacts the environment. First, trade decouples some of regulation's costs from its benefits, prompting demand for stringent environmental regulations. Second, trade provides consumers with access to new varieties of goods; the associated income (substitution) effect raises (lowers) demand for strict regulation. The model predicts (1) international trade to be more environmentally beneficial than intranational trade due to a stronger decoupling effect, and (2) both intra and international trade to be pro-environment unless substitution effects are sufficiently strong. Using data on intra and international trade for the US and Canada, along with several environmental outcomes, we find robust evidence that international trade has a statistically and economically beneficial causal effect on environmental quality, while intranational trade has a harmful impact. This pattern is consistent with a moderate-sized substitution effect along with a stronger decoupling effect of international trade. [Copyright &y& Elsevier]

This study was aimed to collect data and develop methodologies to determine if and how Dutch biowaste composting plants can meet the microbiological requirements set out in EU-Regulations (EC) 1774/2002 and (EC) 1069/2009, and to provide the European Food and Safety Authority (EFSA) with data and analysis for evaluation of these regulations. We examined twenty plant locations and four types of composting technologies, all with forced aeration and without an anaerobic digestion phase. Raw biowaste, material after sanitation and compost were sampled by spot test analysis according to a standard protocol, and according to an additional protocol with enhanced hygienic precautions. Samples were analyzed for Escherichia coli, Enterococcaceae and Salmonella content. The latter protocol resulted in improved bacterial reductions after sanitation, whereas in compost Enterococcus levels but not E. coli levels increased substantially with both protocols, due to more thermo-resistant regrowth. Salmonella presence in compost coincided with low temperatures and increased levels of E. coli and Enterococcus, absence of Salmonella was associated with absence of E. coli (74%), but not with absence of Enterococcus (17%). In compost, E. coli and Salmonella showed a comparable time–temperature inactivation pattern. A pilot study with co-composting of biowaste and poultry manure indicated a similar inactivation pattern for ESBL-containing bacteria. We conclude that the abundance of Enterococcus in compost is caused by regrowth and not by (re)contamination, and that E. coli is a more reliable indicator species for the absence/presence of Salmonella in compost. Compliance with current EU-regulations concerning biowaste composting can be shown by spot test analysis at all examined plants, provided that adequate hygienic precautions are taken during sampling. [Copyright &y& Elsevier]

Abstract: We show that for a broad class of technologies the relationship between policy stringency and the rate of technology adoption is inverted U-shaped. This happens when the marginal abatement cost (MAC) curves of conventional and new technologies intersect, which invariably occurs when emissions are proportional to output and technological progress reduces emissions per output. This outcome does not result from policy failure. On the contrary, in social optimum, the relationship between the slope of the marginal damage curve and the rate of technology adoption is also inverted U-shaped. Under more general conditions, these curves can look even more complicated (e.g., such as inverted W-shaped). [Copyright &y& Elsevier]

The Environmental Liability Directive (ELD) establishes a framework of liability based on the ‘polluter-pays’ principle to prevent and remedy environmental damage. The ELD requires the testing of appropriate equivalency methods to assess the scale of compensatory measures needed to offset damage. The aim of this paper is to contribute to fill the existing knowledge gap on the application of the value equivalency approach for damage compensation in this context. We analyze the toxic spill damaging the Doñana National Park (Spain) in 1998. The welfare losses associated with the resource damage are estimated using non-market valuation and compared to the value of the compensatory measures taken after the accident. Our results show that the in-kind compensation may have been insufficient to offset the welfare losses. We conclude that a more comprehensive knowledge of the human welfare effects caused by environmental damage is of substantial importance to determine compensatory remediation, as insufficient information in this respect can lead to erroneous decisions causing loss to society. [Copyright &y& Elsevier]

Abstract: Environmental regulations that grandfather existing plants, by not holding them to the same strict standards as new plants, may have the unintended consequence of retarding new investment. If new plants are cleaner, then this effect may increase pollution in the short run. I develop a dynamic model of a facility’s decisions over scrapping and abatement, which depend on capital depreciation, profitability shocks, and environmental policy. Using data from fossil fuel fired boilers at electric power plants, I estimate the structural parameters of the model and assess the impact of grandfathering in the Clean Air Act on sulfur dioxide emissions. Counterfactual policy simulations show that an increase in the stringency of performance standards would have led to a decrease in investment in new boilers. However, this does not lead to increased emissions, since there is less investment in dirtier coal boilers as compared to relatively cleaner oil or natural gas boilers. [ABSTRACT FROM AUTHOR]

The Convention on the Control of Harmful Anti-fouling Systems on Ships (AFS Convention), which was adopted in 2001 and will come into force in September 2008, bans the use of TBT (tributyltin) antifouling paint on ships. The EU (European Union) effectively implemented the Convention on 1 January 2008 by enforcing a similar ban. Several states have national restrictions and bans in place. The regulation on TBT antifouling paint aims at checking the risk of adverse effects on marine ecosystems. The legal and political situation is, however, characterized by complex relations between different layers of legislation, the use of several different legal techniques, and levels of ambition. The international and EU bans thereby cause some indirect effects, which are only partly included in what is seen as ‘the TBT issue’ and so only partly assessed in the legal process of the ban. This article discusses the expediency of the existing legislation and legal strategies aimed at reducing the negative environmental effects of TBT-like toxins in marine ecosystems and indirect effects of such actions. It considers the adequacy and limits of current regulatory approaches for handling complex environmental problems, such as TBT in antifouling paint. [Copyright &y& Elsevier]

Organotin-based antifouling paints are highly effective against most fouling organisms, and their application results in a large amount of savings for the shipping industry. On the other hand, TBT (tributyltin) in antifouling paints is described as the most toxic substance ever introduced into the marine environment. Consequential environmental impacts of TBT led to its regulation in many countries, although concerns were raised regarding the complete prohibition of organotin-based compounds in antifouling paints. Serious concerns were also raised regarding the complete banning of organotins. After long deliberations, the AFS Convention (convention to control the use of harmful antifouling systems on ships) was adopted on 5 October 2001. The Convention, which prohibits the use of harmful organotins in antifouling paints used on ships, will enter into force on 17 September 2008. In view of the concerns raised against the prohibition of organotin-based compounds in antifouling paints, this paper focuses on a review of the AFS Convention, with a gap analysis on the difficulties in implementation of the Convention. It also offers some recommendations for improved policies. [Copyright &y& Elsevier]

Abstract: The potential to capture carbon from industrial sources and dispose of it for the long-term, known as carbon capture and sequestration (CCS), is widely recognized as an important option to reduce atmospheric carbon dioxide emissions. Specifically, CCS has the potential to provide emissions cuts sufficient to stabilize greenhouse gas levels, while still allowing for the continued use of fossil fuels. In addition, CCS is both technologically-feasible and commercially viable compared with alternatives with the same emissions profile. Although the concept appears to be solid from a technical perspective, initial public perceptions of the technology are uncertain. Moreover, little attention has been paid to developing an understanding of the social and political institutional infrastructure necessary to implement CCS projects. In this paper we explore a particularly dicey issue—how to ensure adequate long-term monitoring and maintenance of the carbon sequestration sites. Bonding mechanisms have been suggested as a potential mechanism to reduce these problems (where bonding refers to financial instruments used to ensure regulatory or contractual commitments). Such mechanisms have been successfully applied in a number of settings (e.g., to ensure court appearances, completion of construction projects, and payment of taxes). The paper examines the use of bonding to address environmental problems and looks at its possible application to nascent CCS projects. We also present evidence on the use of bonding for other projects involving deep underground injection of materials for the purpose of long-term storage or disposal. [Copyright &y& Elsevier]

Voluntary participation can improve multilateral environmental governance. We model voluntary participation of states in unanimously approved federal environmental policy. A Pareto-improving federal emission price coexists with state-level emission pricing. Federal revenues are distributed equally per capita (egalitarian), in proportion to states' historical emission levels (sovereignty), or states' actual payments (juste retour). We find that the existence of Pareto-improving uniform federal prices depends on wealth differences, transfer rules, and on whether or not states anticipate transfers. Sovereignty transfers work in all cases. Differences in wealth can undermine egalitarian transfers. Juste retour transfers render federal policy ineffective if states anticipate them. The richest state prefers the lowest Pareto-optimal federal price ("minimum price") as it becomes the largest net-donor. Adding different population sizes, the richest and largest (smallest) state prefers the minimum price with sovereignty and juste retour transfers (egalitarian transfers). Therefore, rich states brake and simultaneously make possible passing unanimous federal policy. [ABSTRACT FROM AUTHOR]

Abstract: There are relatively few Federal environmental regulations that influence agricultural production in the US. However, many local and state environmental rules may influence the management practices on US farms as might interactions between urban population centers and agricultural producers. Detailed analysis of corn farms gives insight into these relationships and suggests that stringent environmental regulations could increase the likelihood of adoption of certain conservation practices, all else being constant, but that the interaction between urban populations has less of an effect on the adoption decisions. [Copyright &y& Elsevier]

Abstract: How birds use environmental cues to time breeding, migration and molt has been the subject of intensive study for nearly 90years. Most work has focused on seasonal breeders; opportunistic breeders have been presumed to differ fundamentally from seasonal taxa in ways that facilitate coping with unpredictable environments. Understanding patterns and mechanisms of opportunists’ responses to environmental cues can reveal the extent to which different environments require specialized adaptations of cue response systems. In this review we will present our perspective on how patterns and mechanisms of environmental cue response of three groups of opportunists—zebra finches, crossbills and Darwin’s finches—compare with seasonal breeders. Long-standing predictions regarding tonic activity of the hypothalamic gonadotropin-releasing hormone system have been confirmed in at least some opportunists. However, opportunists resemble seasonal breeders in some surprising ways, illustrating basic similarity among taxa facing very different timing challenges. For instance, many opportunists completely regress the gonads outside breeding times, rely on initial predictive cues (both photic and non-photic) to regulate timing and rate of reproductive development, and in some cases even appear to display internal changes in responsiveness to environmental cues (i.e., cycles of reproductive refractoriness and sensitivity). Although advantages of unrestricted temporal flexibility are intuitively clear for animals coping with unpredictable habitats, the available data on these opportunists indicate that in all but the most extremely capricious situations the advantages of flexibility may be at least partly outweighed by contrasting advantages of following a reliable temporal schedule. [Copyright &y& Elsevier]

The causes for the failure in enforcement of environmental regulations at the Giap Lai pyrite mine in northern Vietnam are considered and the environmental impacts that are associated with this mine are evaluated. It is shown that sulphide-rich tailings and waste rock in the mining area represent significant sources of acid rock drainage (ARD). The ARD is causing elevated metal levels in downstream water bodies, which in turn, represent a threat to both human health and to aquatic ecosystems. Metal concentrations in impacted surface waters have increased after mine closure, suggesting that impacts are becoming progressively more serious. No post-closure, remediation measures have been applied at the mine, in spite of the existence of environmental legislation and both central and regional institutions charged with environmental supervision and control. The research presented here provides further emphasis for the recommendation that, while government institutions may need to be strengthened, and environmental regulations need to be in place, true on the ground improvement in environmental quality in Vietnam and in many other developing countries require an increased focus on promoting public awareness of industrial environmental issues. [Copyright &y& Elsevier]

Abstract: As part of a larger research effort, the empirical basis for this note is responses to four out of many questions in a mailed survey, which primarily focused on national environmental objectives in Sweden. The results show that out of eight broad areas for use of tax money, five—including environment—are rated as important by over 90% of the respondents. Respondents appear to be less willing to discriminate between different issues covered by national environmental objectives, as all of these are rated as important by more than 80% of the respondents. The function of the ozone layer is an example of an environmental issue where the knowledge among people is relatively high, while this is not the case when it comes to the amount of pesticides used in agriculture. The results also show less support for actions at the individual level to improve the environment, as compared to support for actions taken by society at large through, e.g., technological improvement or policy intervention. [Copyright &y& Elsevier]

Abstract: Politically motivated subsidies can have undesired environmental consequences. Asymmetric information regarding firm productivity constrains the government''s ability both to redistribute income and control emissions. Taking political and information constraints as given, this article characterizes a social-welfare maximizing policy. The optimal policy uses a single instrument to achieve both goals, making income-support subsidies contingent upon pollution reduction. Price variation allows the government to design contracts with countervailing incentives, potentially eliminating some firms’ information advantage. [Copyright &y& Elsevier]

Abstract: This paper investigates the welfare consequences of strategic behavior by firms to affect the amount of environmental regulation they face. Environmental regulation often attempts to force an industry to develop cleaner technology, but the regulator may have no means to commit to a specific standard. This lack of regulatory commitment induces firms to choose innovation strategically. It is well-known that firms have incentives to suppress innovation to induce the regulator to ratchet down the standard, and this strategic behavior lowers welfare. This paper explores a countervailing incentive. In oligopoly settings, firms have heightened incentives to innovate so as to increase regulation and raise rivals costs. In equilibrium, the incentive to raise rivals cost can mitigate the welfare loss arising from no regulatory commitment. Also, a regulator who is unable to commit ex ante to the stringency of a regulatory standard can induce more clean technology than a regulator with a commitment mechanism. [Copyright &y& Elsevier]

Abstract: The policy prescription for solving environmental problems of developing countries and countries-in-transition (CIT) is slowly getting polarized into two viewpoints. One group of researchers and policy advocates including multilateral organizations upholds extensive use of market based instruments (MBIs) in these countries. The other group argues that institutions need to be built first or the policy makers should select the incremental or tiered approach taking into account the existing capabilities. The group also insists that the financial, institutional and political constraints make environmental regulation in these countries more problematic than in industrialized countries. In the short-run, the immediate needs of the developing countries can be addressed effectively by learning lessons from the difficulties encountered by a few successful cases and accordingly evolving an appropriate policy instrument. In this paper an attempt has been made to highlight three such cases from three different parts of the world—Malaysia (Asia-pacific), Poland (Eastern Europe) and Colombia (Latin America). The paper looks into what policy instruments led to a fall in water pollution levels in these countries and what role did MBIs play in this pollution mitigation? The case studies suggest that it is a combination of instruments—license fee, standards, charge and subsidies—reinforced by active enforcement that led to an overall improvement in environment compliance. [Copyright &y& Elsevier]

We explore the possibility that firms and regulators achieve cooperative agreements in environmental regulation. We show that it is possible that firms choose cleaner technologies in exchange for reductions of the fines for non-compliance with environmental standards. Interestingly, the likelihood of achieving these agreements depends negatively on the monitoring costs, positively on the external damages, and non-monotonically on the differences among the eligible technologies and the maximum sanctions for violating the standards. [ABSTRACT FROM AUTHOR]

We show that harmonizing emissions policy may be bad for the environment and/or global welfare, even when pollution is transboundary and countries are identical in every way. Harmonization effectively internalizes the transboundary aspects of pollution. But it also changes the politics surrounding tailpipe regulation. With harmonization, producers can no longer avoid strict local regulation by simply exporting their products to overseas markets with weak standards for consumer goods. As a result, harmonization may raise political opposition to regulation. To examine these competing effects we develop a generic treatment of the politics of environmental regulation, a treatment we show to be isomorphic to three popular models of political economy: majority rules, a political elite and a political contributions approach. We find that harmonization both weakens environmental regulation and reduces global welfare when the level of political capture by dirty industry is high relative to the rate of pollution transmission across borders. [ABSTRACT FROM AUTHOR]

This paper examines and quantifies the complex linkages between industrial activity, environmental regulations and air pollution. Couched in terms of the demand for, and the supply of, environmental services we utilize a new dataset of UK industry specific emissions for a variety of pollutants between 1990 and 1998. Our analysis allows us to investigate the role played by different determinants of emissions intensity. We find pollution intensity to be a positive function of energy use and physical and human capital intensity. Conversely, we find pollution intensity to be a negative function of the size of the average firm in an industry, the productivity of an industry and the industry's expenditure on capital and research and development. Our results also indicate that regulations, both formal and informal, have been successful in reducing pollution intensity. [ABSTRACT FROM AUTHOR]

This paper examines the interplay between corruption, political competition, environmental policy and environmental outcomes. An important feature of the model, which has been neglected in the existing literature, is that corruption may occur at different levels of government, such as the payment of bribes to politicians who determine policies, or bureaucrats who administer environmental regulations. We analyse the relationship between political competition and environmental outcomes in a model of stratified corruption and identify the benefits and limits of political competition. Our results suggest that while political competition may yield policy improvements, it cannot eliminate corruption at all levels of government. [ABSTRACT FROM AUTHOR]

This paper makes two empirical contributions to the literature, based on predictions generated by a lobby group model. First, we investigate how environmental lobby groups affect the determination of environmental policy in rich and developing countries. Second, we explore the interaction between democratic participation and political (electoral) competition. The empirical findings suggest that environmental lobby groups tend to positively affect the stringency of environmental policy. Moreover, political competition tends to raise policy stringency, in particular where citizens' participation in the democratic process is widespread. [ABSTRACT FROM AUTHOR]

This paper proposes a positive theory of environmental instrument choice. We study a democratic society that seeks to lower the level of pollution from industrial sources to a pre-specified target. The target can be implemented by one of three instruments: [S]: uniform emission standards; [P]: tradeable permits; and [T]: emission taxes. The conflict of interest between special-interests, representing polluters, and the electorate is resolved by an elected politician. We characterize when each of the three policy instruments is chosen in political equilibrium and show that the transition, observed in many countries, from [S] to either [P] or [T] can be understood as a natural consequence of increasingly ambitious environmental targets. [Copyright &y& Elsevier]

Provision of information on the environmental effects of consumption is often put forward as an appealing alternative to traditional means of environmental regulation such as permits and environmental taxes. When consumers in opinion polls are asked if their purchasing decisions would be influenced by information on environmental or ethical aspects of products, the majority seem very ready to say yes. However, evidence for actual behavior along these lines is still limited. In this paper a mixed logit model is used to quantify the effect of a certified environmental label (the Nordic Swan) on consumers’ brand choices of toilet paper, paper towels and detergents, using a large Danish consumer panel with detailed information on actual purchases from the beginning of 1997 to January 2001. It is found that the Nordic Swan label has had a significant effect on consumers’ brand choices for toilet paper, corresponding to a marginal willingness to pay for the certified environmental label of 13–18% of the price and it also appears that information on environmental performance has had an effect on consumers’ choice of detergent. [Copyright &y& Elsevier]

Few issues are more contentious for local communities than industrial pollution. When local industries pollute, lawmakers and regulators must balance two primary concerns: economic prosperity and the environment. The role of political pressure is well documented in environmental policy. What is less clear is the role jurisdictional or boundary considerations play in determining the implementation of environmental laws. Anecdotal evidence suggests that local regulators are more lenient in their treatment of polluters when the incidence of pollution falls partially on those outside the state. One explanation for such behavior is that regulators take actions to maximize political support. This paper tests this jurisdictional model using toxics release inventory (TRI) data from 1987 to 1996. We find that facilities’ emissions into the air and water are systematically higher in counties that border other states. These results are consistent with the hypothesis that jurisdictional considerations are an important determinant of pollution incidence. [Copyright &y& Elsevier]