Economy and Policy

2007
Yi-Ming Wei, Lan-Cui Liu, Ying Fan, and Gang Wu. 2007. “The impact of lifestyle on energy use and CO2 emission: An empirical analysis of China’s residents.” Energy Policy, 35, 1, Pp. 247-257. Publisher's VersionAbstract
Based on the application of a Consumer Lifestyle Approach (CLA), this paper quantifies the direct and indirect impact of lifestyle of urban and rural residents on China's energy use and the related CO2 emissions during the period 1999–2002. The results show that approximately 26 per cent of total energy consumption and 30 per cent of CO2 emission every year are a consequence of residents’ lifestyles, and the economic activities to support these demands. For urban residents the indirect impact on energy consumption is 2.44 times greater than the direct impact. Residence; home energy use; food; and education, cultural and recreation services are the most energy-intensive and carbon-emission-intensive activities. For rural residents, the direct impact on energy consumption is 1.86 times that of the indirect, and home energy use; food; education, and cultural recreation services; and personal travel are the most energy-intensive and carbon-emission-intensive activities. This paper provides quantitative evidence for energy conservation and environmental protection focused policies. China's security for energy supply is singled out as a serious issue for government policy-makers, and we suggest that government should harmonize the relationships between stakeholders to determine rational strategies.
Jing Cao. 2007. “Measuring green productivity growth for China's manufacturing sectors: 1991-2000.” Asian Economic Journal, 21, 4, Pp. 425-251. Publisher's VersionAbstract
Over the past two decades, China has sustained rapid economic growth of 8–10 percent, part of which is attributed to the positive total factor productivity (TFP) growth. However, this extraordinary economic performance has been accompanied by severe environmental pollution and associated health damage. The conventional TFP method is biased in interpreting the progress of technology change because it does not consider non‐marketable residues, such as environmental pollution, and, hence, efficiency improvements in terms of pollution abatement technology and environmentally friendly management are ignored. This bias might direct our attention to less efficient use of environmental friendly abatement technologies or send wrong signals to policy‐makers. To address this issue, the present paper applies a modified welfare‐based green TFP approach, treating environmental damage as non‐desirable (negative) residual output. Therefore, environmental efficiency is taken into account to accurately interpret technological progress from a social welfare point of view. Based on a national time‐series input–output table, historical capital and labor input data for China and sectoral level air pollution emission data from 1991 to 2000, the empirical results suggest that with increasingly stringent environmental regulations, many pollution intensive sectors, such as electricity, primary metal and chemical industries, improved their environmental efficiency in the late 1990s. However, because of the weak environmental regulations in construction and transportation, and in sectors primarily composed of small private or township and village industrial enterprises, firms within these industries contributed to increasing environmental degradation.
Mun S Ho and Dale W Jorgenson. 2007. “Policies to control air pollution damages.” In Clearing the air: The health and economic damages of air pollution in China, edited by Mun S Ho and Chris P Nielsen. Cambridge, MA: MIT Press. Publisher's VersionAbstract

An interdisciplinary, quantitative assessment of the health and economic costs of air pollution in China, and of market-based policies to build environmental protection into economic development.

China's historic economic expansion is driven by fossil fuels, which increase its emissions of both local air pollutants and greenhouse gases dramatically. Clearing the Air is an innovative, quantitative examination of the national damage caused by China's degraded air quality, conducted in a pathbreaking, interdisciplinary U.S.-China collaboration. Its damage estimates are allocated by sector, making it possible for the first time to judge whether, for instance, power generation, transportation, or an unexpected source such as cement production causes the greatest environmental harm. Such objective analyses can reset policy priorities.

Clearing the Air uses this information to show how appropriate "green" taxes might not only reduce emissions and health damages but even enhance China's economic growth. It also shows to what extent these same policies could limit greenhouse gases, suggesting that wealthier nations have a responsibility to help China build environmental protection into its growth.

Clearing the Air is written for diverse readers, providing a bridge from underlying research to policy implications, with easily accessible overviews of issues and summaries of the findings for nonspecialists and policymakers followed by more specialized, interlinked studies of primary interest to scholars. Taken together, these analyses offer a uniquely integrated assessment that supports the book's economic and policy recommendations.

Mun S Ho and Dale W Jorgenson. 2007. “Sector allocation of emissions and damage.” In Clearing the air: The health and economic damages of air pollution in China, edited by Mun S Ho and Chris P Nielsen. Cambridge, MA: MIT Press. Publisher's VersionAbstract

An interdisciplinary, quantitative assessment of the health and economic costs of air pollution in China, and of market-based policies to build environmental protection into economic development.

China's historic economic expansion is driven by fossil fuels, which increase its emissions of both local air pollutants and greenhouse gases dramatically. Clearing the Air is an innovative, quantitative examination of the national damage caused by China's degraded air quality, conducted in a pathbreaking, interdisciplinary U.S.-China collaboration. Its damage estimates are allocated by sector, making it possible for the first time to judge whether, for instance, power generation, transportation, or an unexpected source such as cement production causes the greatest environmental harm. Such objective analyses can reset policy priorities.

Clearing the Air uses this information to show how appropriate "green" taxes might not only reduce emissions and health damages but even enhance China's economic growth. It also shows to what extent these same policies could limit greenhouse gases, suggesting that wealthier nations have a responsibility to help China build environmental protection into its growth.

Clearing the Air is written for diverse readers, providing a bridge from underlying research to policy implications, with easily accessible overviews of issues and summaries of the findings for nonspecialists and policymakers followed by more specialized, interlinked studies of primary interest to scholars. Taken together, these analyses offer a uniquely integrated assessment that supports the book's economic and policy recommendations.

Chris P Nielsen and Mun S Ho. 2007. “Summary for policy.” In Clearing the air: The health and economic damages of air pollution in China, edited by Mun S Ho and Chris P Nielsen. Cambridge, MA: MIT Press. Publisher's VersionAbstract

An interdisciplinary, quantitative assessment of the health and economic costs of air pollution in China, and of market-based policies to build environmental protection into economic development.

China's historic economic expansion is driven by fossil fuels, which increase its emissions of both local air pollutants and greenhouse gases dramatically. Clearing the Air is an innovative, quantitative examination of the national damage caused by China's degraded air quality, conducted in a pathbreaking, interdisciplinary U.S.-China collaboration. Its damage estimates are allocated by sector, making it possible for the first time to judge whether, for instance, power generation, transportation, or an unexpected source such as cement production causes the greatest environmental harm. Such objective analyses can reset policy priorities.

Clearing the Air uses this information to show how appropriate "green" taxes might not only reduce emissions and health damages but even enhance China's economic growth. It also shows to what extent these same policies could limit greenhouse gases, suggesting that wealthier nations have a responsibility to help China build environmental protection into its growth.

Clearing the Air is written for diverse readers, providing a bridge from underlying research to policy implications, with easily accessible overviews of issues and summaries of the findings for nonspecialists and policymakers followed by more specialized, interlinked studies of primary interest to scholars. Taken together, these analyses offer a uniquely integrated assessment that supports the book's economic and policy recommendations.

Chris P Nielsen and Mun S Ho. 2007. “Summary for research.” In Clearing the air: The health and economic damages of air pollution in China, edited by Mun S Ho and Chris P Nielsen. Cambridge, MA: MIT Press. Publisher's VersionAbstract

An interdisciplinary, quantitative assessment of the health and economic costs of air pollution in China, and of market-based policies to build environmental protection into economic development.

China's historic economic expansion is driven by fossil fuels, which increase its emissions of both local air pollutants and greenhouse gases dramatically. Clearing the Air is an innovative, quantitative examination of the national damage caused by China's degraded air quality, conducted in a pathbreaking, interdisciplinary U.S.-China collaboration. Its damage estimates are allocated by sector, making it possible for the first time to judge whether, for instance, power generation, transportation, or an unexpected source such as cement production causes the greatest environmental harm. Such objective analyses can reset policy priorities.

Clearing the Air uses this information to show how appropriate "green" taxes might not only reduce emissions and health damages but even enhance China's economic growth. It also shows to what extent these same policies could limit greenhouse gases, suggesting that wealthier nations have a responsibility to help China build environmental protection into its growth.

Clearing the Air is written for diverse readers, providing a bridge from underlying research to policy implications, with easily accessible overviews of issues and summaries of the findings for nonspecialists and policymakers followed by more specialized, interlinked studies of primary interest to scholars. Taken together, these analyses offer a uniquely integrated assessment that supports the book's economic and policy recommendations.

2006
Xiaoqi Guo. 2006. “The economic value of air-pollution-related health risks in China.” Department of Agricultural, Environmental and Development Economics, Ohio State University.
James K Hammitt and Ying Zhou. 2006. “The economic value of air-pollution-related health risks in China: A contingent valuation study.” Environmental Resource Economics, 33, 3, Pp. 399-423. Publisher's VersionAbstract
The economic value of preventing adverse health effects related to air pollution is estimated using contingent valuation in three diverse locations in China. Values are estimated for three health endpoints: cold, chronic bronchitis, and fatality. Alternative statistical models are tested to study their impact on estimated willingness to pay (WTP) and on the relationship between WTP and respondent characteristics. Using the official exchange rate, the sample-average median WTP to prevent an episode of cold ranges between US$3 and US$6, the WTP to prevent a statistical case of chronic bronchitis ranges between US$500 and US$1,000, and the value per statistical life ranges between US$4,000 and US$17,000. Estimated mean values are between two and thirteen times larger. Our estimates are between about 10 and 1,000 times smaller than estimates for the US and Taiwan using official exchange rates. Indoor air quality, measured for a subset of respondents, shows no consistent relationship with WTP.
Hong Wang and John Mullahy. 2006. “Willingness to pay for reducing fatal risk by improving air quality: A contingent valuation study in Chongqing, China.” Science of the Total Environment, 367, Pp. 50-57. Publisher's VersionAbstract

In China, 76% of all energy comes from coal consumption, which is the major cause of air pollution. One of the major barriers to developing sound policies for controlling air pollution is the lack of information related to the value of the health consequences of air pollution. We conducted a willingness-to-pay (WTP) study using contingent valuation (CV) methods in Chongqing, China to estimate the economic value of saving one statistical life through improving air quality.

A sample of 500 residents was chosen based on multistage sampling methods. A face-to-face household interview was conducted using a series of hypothetical, open-ended scenarios followed by bidding game questions designed to elicit the respondents' WTP for air pollution reduction. The Two-Part Model was used for estimations.

The results show that 96% of respondents were able to express their WTP. Their mean annual income is $490. Their WTP to save one statistical life is $34,458. Marginal increases for saving one statistical life is $240 with 1 year age increase, $14,434 with 100 yuan monthly income increase, and $1590 with 1 year education increase. Unlike developed country, clean air may still be considered as a “luxury” good in China based on the estimation of income elasticity.

2003
Karen Fisher-Vanden. 2003. “The effects of market reforms on structural change: Implications for energy use and carbon emissions in China.” Energy Journal, 24, 3, Pp. 27-62. Publisher's VersionAbstract
This paper assesses the role played by market reforms in shaping the future level and composition of production, energy use, and carbon emissions in China. Arguments have been made that reducing distortions in China's economy through market reforms will lead to energy efficiency improvements and lower carbon emissions in China. However, these arguments are based on partial and not general equilibrium analyses, and therefore overlook the effects of market reforms on economic growth and structural change. The results suggest that further implementation of market reforms could result in a structural shift to less carbon-intensive production and thus lower carbon emissions per unit GDP. However, this fall in carbon intensity is not enough to compensate for the greater use of energy as a result of market reforms due to higher economic growth and changes in the composition of production. Therefore, China's transition to a market economy could result in significantly higher economic growth, energy use, and carbon emissions. These results could have implications for other countries considering or undergoing market transition.
Karen Fisher-Vanden. 2003. “Management structure and technology diffusion in Chinese state-owned enterprises.” Energy Policy, 31, 3, Pp. 247-257. Publisher's VersionAbstract
This paper identifies factors that can explain the variation in the diffusion of continuous casting technology among Chinese steel firms during the period 1985–1995. Potential factors affecting firm-level diffusion of continuous casting technology are tested econometrically using data from 75 Chinese steel firms. The results suggest that institutional factors, such as management structure, have had a significant influence on a firm's rate of diffusion. In particular, the results show that although centrally managed firms are typically the first to acquire a new technology, complete integration of the technology into the production process occurs more rapidly in firms that are locally managed. Furthermore, the results suggest that certain market factors are important in a locally managed firm's decision to convert, but seem to have played a lesser role in centrally managed firms. These results imply that although centrally managed firms have better access to new technologies due to their close ties to the central government, locally managed firms may possess a greater incentive to improve production efficiency through the incorporation of new technology.
2002
Mun S Ho, Dale W Jorgenson, and Wenhua Di. 2002. “Pollution taxes and public health.” In Economics of the Environment in China, edited by Jeremy J. Warford and Yi Ning Li. Bethesda, MD: Aileen International Press.
1999
Richard Garbaccio, Mun S Ho, and Dale W Jorgenson. 1999. “Controlling carbon emissions in China.” Environment and Development Economics, 4, 4, Pp. 493-518. Publisher's VersionAbstract
We examine the use of carbon taxes to reduce emissions of CO2 in China. To do so, we develop a dynamic computable general equilibrium (CGE) model of the Chinese economy. In addition to accounting for the effects of population growth, capital accumulation, technological change, and changing patterns of demand, we also incorporate into our model elements of the dual nature of China's economy where both plan and market institutions exist side by side. We conduct simulations in which carbon emissions are reduced by 5, 10, and 15 per cent from our baseline. After initial declines, in all of our simulations GDP and consumption rapidly exceed baseline levels as the revenue neutral carbon tax serves to transfer income from consumers to producers and then into increased investment. Although subject to a number of caveats, we find potential for what is in some sense a 'double dividend', a decrease in emissions of CO2 and a long run increase in GDP and consumption.
Richard Garbaccio, Mun S Ho, and Dale W Jorgenson. 1999. “Why has the energy output ratio fallen in China?” Energy Journal, 20, 3, Pp. 63-91. Publisher's VersionAbstract
In China, between 1978 and 1995, energy use per unit of GDP fell by 55 percent. There has been considerable debate about the major factors responsible for this dramatic decline in the energy-output ratio. In this paper we use the two most recent input-output tables to decompose the reduction in energy use into technical change and various types of structural change, including changes in the quantity and composition of imports and exports. In performing our analysis we are forced to deal with a number of problems with the relevant Chinese data and introduce some simple adjustments to improve the consistency of the input-output tables. Our main conclusion is that between 1987 and 1992, technical change within sectors accounted for most of the fall in the energyoutput ratio. Structural change actually increased the use of energy. An increase in the import of some energy-intensive products also contributed to the decline in energy intensity.
1998
Mun S Ho, Dale W Jorgenson, and Dwight H. Perkins. 1998. “China’s economic growth and carbon emissions.” In Energizing China: Reconciling Environmental Protection and Economic Growth, edited by Michael B. McElroy, Chris P Nielsen, Peter Lydon, and eds.. Cambridge, MA: HUCE/Harvard University Press. Publisher's VersionAbstract

As China develops its booming, fossil fuel-powered economy, is it taking lessons from the history of Western industrialization and the unforeseen environmental harms that accompanied it? Given the risks of climate change, is there an imperative, shared responsibility to help China respond to the environmental effects of its coal dependence? By linking global hazards to local air pollution concerns—from indoor stove smoke to burgeoning ground-level ozone—this volume of eighteen studies seeks integrated strategies to address simultaneously a range of harmful emissions. Counterbalancing the scientific inquiry are key chapters on China’s unique legal, institutional, political, and cultural factors in effective pollution control.

Energizing China, the stage-setting publication of an ongoing program of Harvard–China research collaboration, is distinguished by its conceptual breadth and spirit of exchange. Its contributors include twenty-two Western and seventeen Chinese scholars with a disciplinary reach that includes science, public health, engineering, economics, public policy, law, business, and China studies.

Theodore Panayotou. 1998. “The effectiveness and efficiency of environmental policy in China.” In Energizing China: Reconciling Environmental Protection and Economic Growth, edited by Michael B. McElroy, Chris P Nielsen, Peter Lydon, and eds.. Cambridge, MA: HUCE/Harvard University Press. Publisher's VersionAbstract

As China develops its booming, fossil fuel-powered economy, is it taking lessons from the history of Western industrialization and the unforeseen environmental harms that accompanied it? Given the risks of climate change, is there an imperative, shared responsibility to help China respond to the environmental effects of its coal dependence? By linking global hazards to local air pollution concerns—from indoor stove smoke to burgeoning ground-level ozone—this volume of eighteen studies seeks integrated strategies to address simultaneously a range of harmful emissions. Counterbalancing the scientific inquiry are key chapters on China’s unique legal, institutional, political, and cultural factors in effective pollution control.

Energizing China, the stage-setting publication of an ongoing program of Harvard–China research collaboration, is distinguished by its conceptual breadth and spirit of exchange. Its contributors include twenty-two Western and seventeen Chinese scholars with a disciplinary reach that includes science, public health, engineering, economics, public policy, law, business, and China studies.

1998. Energizing China: Reconciling Environmental Protection and Economic Growth. Cambridge, MA: HUCE/Harvard University Press. Publisher's VersionAbstract

As China develops its booming, fossil fuel-powered economy, is it taking lessons from the history of Western industrialization and the unforeseen environmental harms that accompanied it? Given the risks of climate change, is there an imperative, shared responsibility to help China respond to the environmental effects of its coal dependence? By linking global hazards to local air pollution concerns—from indoor stove smoke to burgeoning ground-level ozone—this volume of eighteen studies seeks integrated strategies to address simultaneously a range of harmful emissions. Counterbalancing the scientific inquiry are key chapters on China’s unique legal, institutional, political, and cultural factors in effective pollution control.

Energizing China, the stage-setting publication of an ongoing program of Harvard–China research collaboration, is distinguished by its conceptual breadth and spirit of exchange. Its contributors include twenty-two Western and seventeen Chinese scholars with a disciplinary reach that includes science, public health, engineering, economics, public policy, law, business, and China studies.

Jingwen Li. 1998. “Energy economics in building a modern China.” In Energizing China: Reconciling Environmental Protection and Economic Growth, edited by Michael B. McElroy, Chris P Nielsen, Peter Lydon, and eds.. Cambridge, MA: HUCE/Harvard University Press. Publisher's VersionAbstract

As China develops its booming, fossil fuel-powered economy, is it taking lessons from the history of Western industrialization and the unforeseen environmental harms that accompanied it? Given the risks of climate change, is there an imperative, shared responsibility to help China respond to the environmental effects of its coal dependence? By linking global hazards to local air pollution concerns—from indoor stove smoke to burgeoning ground-level ozone—this volume of eighteen studies seeks integrated strategies to address simultaneously a range of harmful emissions. Counterbalancing the scientific inquiry are key chapters on China’s unique legal, institutional, political, and cultural factors in effective pollution control.

Energizing China, the stage-setting publication of an ongoing program of Harvard–China research collaboration, is distinguished by its conceptual breadth and spirit of exchange. Its contributors include twenty-two Western and seventeen Chinese scholars with a disciplinary reach that includes science, public health, engineering, economics, public policy, law, business, and China studies.

F. E. S. Murray, F. Reinhardt, and R. Vietor. 1998. “Foreign firms in the Chinese power sector: economic and environmental impacts.” In Energizing China: Reconciling Environmental Protection and Economic Growth, edited by M.B. McElroy, C.P. Nielsen, P. Lydon, and eds.. Cambridge, MA: HUCE/Harvard University Press. Publisher's VersionAbstract

As China develops its booming, fossil fuel-powered economy, is it taking lessons from the history of Western industrialization and the unforeseen environmental harms that accompanied it? Given the risks of climate change, is there an imperative, shared responsibility to help China respond to the environmental effects of its coal dependence? By linking global hazards to local air pollution concerns—from indoor stove smoke to burgeoning ground-level ozone—this volume of eighteen studies seeks integrated strategies to address simultaneously a range of harmful emissions. Counterbalancing the scientific inquiry are key chapters on China’s unique legal, institutional, political, and cultural factors in effective pollution control.

Energizing China, the stage-setting publication of an ongoing program of Harvard–China research collaboration, is distinguished by its conceptual breadth and spirit of exchange. Its contributors include twenty-two Western and seventeen Chinese scholars with a disciplinary reach that includes science, public health, engineering, economics, public policy, law, business, and China studies.

Chris P Nielsen and Michael B. McElroy. 1998. “Introduction and overview.” In Energizing China: Reconciling Environmental Protection and Economic Growth, edited by Michael B. McElroy, Chris P. Nielsen, and Peter Lydon. Cambridge, MA: HUCE/Harvard University Press. Publisher's VersionAbstract

As China develops its booming, fossil fuel-powered economy, is it taking lessons from the history of Western industrialization and the unforeseen environmental harms that accompanied it? Given the risks of climate change, is there an imperative, shared responsibility to help China respond to the environmental effects of its coal dependence? By linking global hazards to local air pollution concerns—from indoor stove smoke to burgeoning ground-level ozone—this volume of eighteen studies seeks integrated strategies to address simultaneously a range of harmful emissions. Counterbalancing the scientific inquiry are key chapters on China’s unique legal, institutional, political, and cultural factors in effective pollution control.

Energizing China, the stage-setting publication of an ongoing program of Harvard–China research collaboration, is distinguished by its conceptual breadth and spirit of exchange. Its contributors include twenty-two Western and seventeen Chinese scholars with a disciplinary reach that includes science, public health, engineering, economics, public policy, law, business, and China studies.

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