China Policy Journal Volume 1, Number 1, Fall 2018 | Page 114
China Policy Journal • Vol. 1, No. 1 • Fall 2018
Environmental Performance Rating and Disclosure:
An Empirical Investigation in Jiangsu, China
Yanhong Jin 1 , Hua Wang 2* , David Wheeler 3
Abstract
Environmental performance rating and disclosure (PRD) has
emerged as an alternative or complementary approach to conventional
pollution regulation, especially in developing countries.
However, little systematic research has been conducted on the effectiveness
of this emerging environmental policy instrument. This
paper investigates the impact of a PRD program, Green Watch in
Jiangsu, China, which has been operating for more than 10 years.
This study assesses the impact of Green Watch by using panel data
on pollution emissions from rated and unrated firms, before and
after implementation of the program. Controlling for the characteristics
of firms and locations, time trend, and the initial level of
environmental performance, we draw two main findings: (1) firms
covered by Green Watch improved their environmental performance
more than non-covered firms and (2) the program effects
varied by the initial level of environmental performance: bad performers
improved more than good performers and moderately
non-compliant firms improve more than firms that are significantly
out of compliance. The reasons for these different responses seem
to be that the strengths of incentives that the disclosure program
provides to the polluters at different levels of compliance are different
and the abatement costs of achieving desired levels of ratings
are different for different firms. Further investigation is merited for
a large scale or even a national level in most recent years.
1
Rutgers, The State University of New York, New Brunswick, NJ
2
Renmin University of China, Beijing
3
Independent Scholar
*
Corresponding author: [email protected]
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doi: 10.18278/cpj.1.1.5