Recently, the paper titled "Enforcement of Pollution Levies in China" by SOE Assistant Professor Dr. Liguo Lin was accepted by tier-1 Journal of Public Economics for publication.
In this paper, Dr. Lin investigates how industrial plants react to inspections conducted by environmental authorities under the pollution levy (taxation) regulation in China. Contrary to studies in the United States and Canada (Magat and Viscusi, 1990; Laplant and Rilstone, 1996), and previous studies in China (Dasgupta et al. 2001), this paper finds that inspections increase plants' self-reported pollution by 3.45%. It provides a model to analyze plants' strategic reactions to the pollution levy regulation in China. The model concludes that under the specific regulation, plants' actual pollution might increase with inspections. The study provides a key policy implication that inspections by environmental authorities in China are effective for verifying plants' self-reported pollution but not for reducing their pollution.
