Environmental Performance Rating and Disclosure : An Empirical Investigation of China’s Green Watch Program
Environmental performance rating and disclosure 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 effectiv...
| Main Authors: | , , |
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| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100916105353 http://hdl.handle.net/10986/3904 |
| Summary: | Environmental performance rating and
disclosure 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
policy instrument. This paper investigates the impact of a
Chinese performance rating and disclosure program, Green
Watch, which has been operating for 10 years. To assess the
impact of Green Watch, the authors use 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
initial level of environmental performance, the analysis
finds that firms covered by Green Watch improve their
environmental performance more than non-covered firms. Bad
performers improve 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. |
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