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NIPR newsletter, August 2000





1 - Endogenous Enforcement and Effectiveness of China's Pollution Levy System
2 - Pollution Charge, Community Pressure and Abatement Cost: An Analysis of
Chinese Industries
3 - Professional Association for China's Environment (PACE) Conference set for
August 31st
4 - World Bank's Draft Environment Strategy for Latin America and Caribbean
Seeking Comments
5 - PROPER: A Model for Promoting Environmental Compliance and Transparency in
Developing Countries.  Also see          the Millennium Quiz
6 - More OnTheNet, Conferences, and EPAs of the World updates


Dear Friend:

Despite the slow summer season, the NIPR team is still able to provide a 
sizable
selection of new research offerings, as well as updates for ongoing features
like the OnTheNet page of web links, the Conference page, and new EPAs of the
World.  In this edition, Dr. Hua Wang, who heads NIPR's research on the
evolution of China's environmental management, offers two new papers.  Also
former NIPR member Shakeb Afsah has produced a comprehensive manual on the
Indonesian PROPER program.  We hope you will find these additions interesting
and helpful in providing you with new perspectives regarding the 
environment and
regulation.

1 - Endogenous Enforcement and Effectiveness of China's Pollution Levy System

Drs. Hua Wang and David Wheeler investigate two aspects of China's pollution
levy system, which has been implemented by the State Environmental Protection
Administration for the past twenty years.  First, the determinants of
differences in enforcement of the levy across urban areas have been analyzed.
The results show that actual collections of the uniformly designed pollution
levy are sensitive to differences in economic development and environmental
quality.  This suggests the existence of "endogenous enforcement".  Secondly,
the impact of pollution charges on industry's environmental performance in
different areas have been analyzed.  Analysis reveals industry's response 
to the
levy is decomposed into two components: pollution intensity of process
production and degree of end-of-pipe abatement.  The econometrics suggests
plants are responding strongly to the levy by either abating air pollution in
the production process or treating water pollution at the end-of-pipe.
http://www.worldbank.org/nipr/work_paper/hua/levywp2000.pdf

2 - Pollution Charge, Community Pressure and Abatement Cost: An Analysis of
Chinese Industries

Dr. Wang evaluates the strength of community pressure and pollution charges on
industrial pollution control in China and estimates the marginal pollution
abatement cost.  Using a well-documented plant-level dataset, combined with
community-level data, Dr. Wang assesses the impact of pollution charge
instruments as well as community pressure on industrial behavior.  He 
constructs
a water pollution discharge model to estimate industrial plants which violate
discharge standards, pay pollution charges, and are continually under community
pressure for further pollution abatement.   Implicit prices for pollution
discharges from community pressure are estimated with the discharge model, 
which
are jointly determined by the explicit price, the pollution levy.  The two
prices are then compared, and it is found that the estimated implicit price is
at least as high as the explicit price, which implies that community pressure
exists and can be as strong as a pollution charge in providing incentives for
Chinese firms to abate.  The pollution discharge model approach also provides a
way for estimating marginal pollution abatement costs.  The author's empirical
results show that the current levels of marginal abatement costs are about 
twice
the effective charge rate in China.
http://www.worldbank.org/nipr/work_paper/hua/costcurvewp.pdf

3 - Professional Association for China's Environment (PACE) Conference set for
August 31st

In the last two decades, China has undergone significant policy reform in all
sectors of its economy, as well as in corporate and public governance.  These
reforms continue today, as demonstrated by the government's recent 
reductions in
staffing levels, reorganization of important ministries, and effort to gain
membership into the World Trade Organization.  All these developments may
profoundly impact the country's environment.  How the government's reforms
affect the links between economic growth and environment degradation now and in
the future will be the focus of discussion and debate at the Professional
Association for China's Environment's (PACE) annual conference at the
Washington, DC headquarters of the World Bank from August 31st through 
September
2nd.  Among the featured speakers at the conference will be senior advisors 
from
China's State Environmental Protection Agency (SEPA) and leading Bank
researchers on China's environment.  PACE is a network of environmental
professionals and policymakers worldwide 's interested in promoting
environmentally sustainable development in China.  To achieve its objective,
PACE disseminates research findings, conducts research programs with 
central and
local governments, and NGOs, and is building a repository on China's
environmental regulations and policies.  For more information, contact PACE at
Pace@gmu.edu or visit its website at http://www.chinaenvironment.net.  The
conference is open to the public.  If you wish to attend, it will be held 
at the
World Bank's "H" Building, 600 19th Street, NW, Room H1-200 in Washington, DC.

4 - World Bank's Draft Environment Strategy for Latin America and Caribbean
Seeking Comments

The World Bank's draft of its corporate environmental strategy for Latin 
America
and the Caribbean over the next five years is available for review, and the
draftees are actively seeking public comments through a new website.  The draft
currently proposes three significant developmental objectives related to the
environment.  They are: protecting health from indoor and outdoor air
pollutants, dirty water and toxic substances; enhancing livelihoods of the poor
through sustainable natural resource management; and reducing the poor's
vulnerability to natural disasters.  This work in progress is ready to receive
public comment from now through early October, 2000 via the website.  The
consultation process will also take place by email and through regional 
meetings
with policymakers and stakeholders in the Dominican Republic, Costa Rica,
Colombia and Brazil.
http://wbln0018.worldbank.org/lac/ENVStrategy/AR/cover.nsf

5 - PROPER: A Model for Promoting Environmental Compliance and Transparency in
Developing Countries.  Also see the Millennium Quiz

Shakeb Afsah, a former NIPR team member involved in helping design a public
information disclosure and rating system in Indonesia and the Philippines, has
produced an insightful manual on this important environmental management tool.
The Program for Pollution Control, Evaluation, and Rating, best known as 
PROPER,
was initiated by Indonesia's environmental ministry, BAPEDAL, in 1995.  Under
the program, BAPEDAL collected and analyzed information on the environmental
performance of a variety of industries.  Then the agency provided each company
with a color-coded rating to signify whether its environmental performance was
acceptable or poor.  For example, if a plant was given a "gold" rating, it had
achieved world class environmental performance.  On the other hand, if a plant
received a "black" rating, it was a polluter damaging the environment and 
was in
violation of existing regulations.  This rating was then disseminated to the
public through the news media.  At the heart of the program was the notion that
a company valued its reputation with the community.  To avoid public
embarrassment, a company would take measures to improve its environmental
performance in order to achieve regulatory acceptance.  As an incentive against
underachieving competitors, a rating of a plant's environmental performance
beyond existing standards would signal consumers about the company's
environmental awareness and concern.  PROPER, a controversial innovation at the
time of its launch, quickly proved an effective mechanism for changing 
behavior.
Its effectiveness in Indonesia was so pronounced that similar initiatives have
been adopted in the Philippines, China and South America.  In this colorful
presentation, Afsah explains the program and why it has been so powerful.  Also
take a moment to visit the Millennium Quiz, a World Bank website that shows how
people in the developing world are combining technological and policy
innovations with their own imaginations to build a sustainable world.  Part of
the quiz includes the implementation of PROPER in Indonesia.
http://www.worldbank.org/nipr/work_paper/PROPER2.pdf
http://www.worldbank.org/millennium/html/innovate.html

6 - More OnTheNet, Conferences, and EPAs of the World updates

We have made our regular update to the OnTheNet, Conferences and EPAs of the
World sections.  Among the highlights of recently added environmental links to
be found OnTheNet include: United Nations Environment Statistics Section, which
provides numerous databases on environmental and sustainable development
statistics and indicators including a substantial amount of information on
non-OECD countries; the Investor Responsibility Research Center, whose
Environmental Information Service gathers corporate reports and US EPA data in
order to track corporate environmental performance for investors, corporations
and law firms; the Business Council for Sustainable Development - Latin 
America,
which promotes environmental education and sustainable development training for
businesses in the region: and the Asia-Pacific Forum of Environmental
Journalists, an NGO dedicated to promoting environmental awareness in the
reporting of local, regional and international development issues.
http://www.worldbank.org/nipr/onthenet.htm
http://www.worldbank.org/nipr/conferences/index.htm
http://www.worldbank.org/nipr/epas.htm

As always, NIPR seeks to offer information which is both informative and
relevant to the work to our audience.  And we appreciate your continued 
interest
in NIPR's research.  Your feedback, opinions and ideas are important and
contribute substantially to the new materials we present on the site.  If you
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to let us know or have them contact us directly. If you wish to no longer
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dshaman@worldbank.org. Best wishes.