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Who will Spend more Pollution Abatement Costs: does Size Matter?
Qianqian Wang1, Xun Fan1, Bing Zhang2
1State Key Laboratory of Pollution Control & Resource Reuse, School of Environment, Nanjing University, 163 Xianlin Avenue, Nanjing, 210023, China.
Environmental Management
|January 29, 2024
Summary
Enterprise size significantly impacts pollution abatement costs in China. Larger firms exhibit lower costs due to increased investment in abatement technologies, despite facing similar regulatory intensity.
Area of Science:
- Environmental Economics
- Industrial Ecology
- Chinese Economy
Background:
- Firm size is a critical factor in economic analysis, potentially influencing environmental performance.
- China's industrial landscape features size-dependent distortions, necessitating investigation into enterprise scale and pollution costs.
Purpose of the Study:
- To examine the relationship between enterprise size and pollution abatement costs in China.
- To identify the mechanisms driving variations in pollution abatement costs across different firm sizes.
Main Methods:
- Analysis of firm-level datasets from China.
- Econometric examination of pollution abatement costs in relation to enterprise size.
- Exploration of mechanisms including investment, regulation, and technology.
Main Results:
- Pollution abatement costs decrease with increasing enterprise size.
- Marginal decreases in costs per 1000 CNY industrial output for largest vs. smallest firms: 3.29 CNY (gas), 0.54 CNY (SO2), 2.60 CNY (dust).
- Large enterprises show higher pollutant removal efficiency (SO2: 4.92%, dust: 1.82%) and potentially greater adoption of abatement technologies.
Conclusions:
- Enterprise size is inversely correlated with pollution abatement costs.
- Reduced environmental protection investment intensity in larger firms may explain lower abatement costs.
- Large enterprises' technological capabilities contribute to lower costs and higher efficiency, not necessarily weaker regulation.
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