Hiroyuki Taguchi

Director of Department of Administrative Affairs, Economic and Social Research Institute, Cabinet Office

Harutaka Murofushi

Research Officer, Economic and Social Research Institute, Cabinet Office

This study examines, with a focus on regional environmental states in China, whether regional latecomers enjoy the spillover effects of nation-wide progress in environmental management and technology, or stay behind from environmental progress, or even suffer the "pollution heaven" effects through the relocation of polluters towards those regions, using the analytical framework of the environmental Kuznets curve.
The study's main findings are as follows. First, the provincial panel data proved the validity of the EK curve hypothesis in industrial emissions in China. Second, the regional latecomer's advantage was verified in the case of waste water, while its disadvantage was identified in waste gas and solid waste. Third, as for nation-wide technological progress, the national latecomer's advantage was identified in the case of waste water, sulfur dioxide, and soot. We speculate that the contrasting result on regional latecomer's effects between waste water, waste gas, and solid waste comes from the difference in policy performances: the matured and well-designed water pollution control may have regional latecomers enjoying the spillover effects of nation-wide progress, while the premature and ineffective control of air and solid waste pollution may cause pollution leakage for regional latecomers. We also presume that nation-wide technological progress in waste and air pollution control may reflect the fact that China, as a developing country, is obtaining technological transfers from advanced countries.