Publication:
Incentives for Pollution Control: Regulation and Public Disclosure

Loading...
Thumbnail Image
Files in English
English PDF (2.26 MB)
505 downloads
Published
2000-02
ISSN
Date
2015-07-29
Editor(s)
Abstract
An increasing number of regulators have adopted public disclosure programs to create incentives for pollution control. Previous empirical analyses of monitoring and enforcement issues have focused strictly on the impact of such traditional practices as monitoring (inspections) and enforcement (fines and penalties) on polluters' environmental performance. Other analyses have separately focused on the impact of public disclosure programs. But can these programs create incentives in addition to the normal incentives of fines and penalties? The authors study the impact of both traditional enforcement and information strategies in the context of a single program, to gain insights into the relative impact of traditional (fines and penalties) and emerging (public disclosure) enforcement strategies. Their results suggest that the public disclosure strategy adopted by the province of British Columbia, Canada, has a greater impact on both emission levels and compliance status than do orders, fines, and penalties traditionally imposed by the courts and the Ministry of the Environment. But their results also demonstrate that adopting stricter standards and higher penalties also significantly affected emission levels. Policymakers, take note: 1) The presence of strong, clear standards together with a significant, credible penalty system sends appropriate signals to the regulated community, which responds by lowering pollution emissions. 2) The public disclosure of environmental performance creates strong additional incentives to control pollution.
Link to Data Set
Citation
Foulon, Jérôme; Lanoie, Paul; Laplante, Benoît. 2000. Incentives for Pollution Control: Regulation and Public Disclosure. Policy Research Working Paper;No. 2291. © World Bank. http://hdl.handle.net/10986/22332 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Report Series
Other publications in this report series
  • Publication
    Intergenerational Income Mobility around the World
    (Washington, DC: World Bank, 2025-07-09) Munoz, Ercio; Van der Weide, Roy
    This paper introduces a new global database with estimates of intergenerational income mobility for 87 countries, covering 84 percent of the world’s population. This marks a notable expansion of the cross-country evidence base on income mobility, particularly among low- and middle-income countries. The estimates indicate that the negative association between income mobility and inequality (known as the Great Gatsby Curve) continues to hold across this wider range of countries. The database also reveals a positive association between income mobility and national income per capita, suggesting that countries achieve higher levels of intergenerational mobility as they grow richer.
  • Publication
    Engineering Ukraine’s Wirtschaftswunder
    (Washington, DC: World Bank, 2025-07-29) Akcigit, Ufuk; Kilic, Furkan; Lall, Somik; Shpak, Solomiya
    As Ukraine emerges from the devastation of war, it faces a historic opportunity to engineer its own Wirtschaftswunder—a productivity-driven economic transformation akin to post-war West Germany. While investment-led growth may offer quick wins, it is efficiency, innovation, and institutional reform that will determine Ukraine’s long-term economic trajectory. Drawing on rich micro-level firm data spanning 25 years, this paper uncovers deep structural distortions that have suppressed creative destruction and productivity in Ukraine. It finds that business dynamism is on the decline, alongside rising market concentration among incumbent businesses, including low productivity state owned enterprises. To inform priorities for reviving business dynamism, this study develops a model of creative destruction drawing on Acemoglu et al. (2018) and Akcigit et al. (2021). The quantitative assessment highlights that policies that discipline entrenched incumbents are the bedrock for reviving business dynamism and engineer Ukraine’s Wirtschaftswunder. Policies targeting specific types of firms have limited efficacy when incumbents run wild.
  • Publication
    Fiscal Multipliers in Resource-Rich Economies: Evidence from the Gulf Countries
    (Washington, DC: World Bank, 2025-08-21) Chattha, Muhammad Khudadad; Kawalec, Tobias
    This paper utilizes the unique dynamics of fiscal budgeting in countries with a large hydro-carbon sector to estimate fiscal multipliers. The main identifying assumption rests on the idea that exogenously identified global hydrocarbon demand shocks can be considered plausible instruments for the fiscal space of countries in which that space is significantly dictated by hydrocarbon income, with such shocks being uncorrelated with non-hydrocarbon output at the same time. Using a local projection-instrumental variables (LP-IV) framework, the paper estimates that short-run fiscal expenditure multipliers to be in the ballpark of 0.1–0.4. In addition, the findings show that multipliers are at the upper end of this interval during recessions, indicating that fiscal policy in the Gulf countries is particularly effective during economic downturns.
  • Publication
    Stress Testing Survey to Survey Imputation: Understanding When Poverty Predictions Can Fail
    (Washington, DC: World Bank, 2025-08-21) Corral, Paul; Ham, Andres; Lanjouw, Peter; Lucchetti, Leonardo; Stemmler, Henry
    Accurate and timely poverty measurement is central to development policy, yet the availability of up-to-date high-quality household survey data remains limited—particularly in countries where poverty is most concentrated. Survey-to-survey imputation has emerged as a practical response to this challenge, allowing practitioners to update poverty estimates using recent surveys that lack direct welfare measures by borrowing information from other comprehensive surveys. A critical review of the method is provided, revisiting its statistical underpinnings and testing its limitations through extensive model-based simulations. Through these simulations, the analysis demonstrates how violations of parameter stability, omitted variable bias, and shifts in survey design can introduce substantial errors—particularly when imputing across time or under economic and structural change. Results show that standard corrections such as re-weighting or covariate standardization may fail to eliminate these biases, especially when imputing across time or under structural change. The performance of alternative model specifications is also evaluated under various methods, including performance under heteroskedastic errors, non-normality. The findings offer practical guidance for practitioners on when survey-to-survey imputation is likely to succeed, when it should be reconsidered, and how to communicate its limitations transparently in the context of poverty monitoring and policy design.
  • Publication
    The Future of Poverty
    (Washington, DC: World Bank, 2025-07-15) Fajardo-Gonzalez, Johanna; Nguyen, Minh C.; Corral, Paul
    Climate change is increasingly acknowledged as a critical issue with far-reaching socioeconomic implications that extend well beyond environmental concerns. Among the most pressing challenges is its impact on global poverty. This paper projects the potential impacts of unmitigated climate change on global poverty rates between 2023 and 2050. Building on a study that provided a detailed analysis of how temperature changes affect economic productivity, this paper integrates those findings with binned data from 217 countries, sourced from the World Bank’s Poverty and Inequality Platform. By simulating poverty rates and the number of poor under two climate change scenarios, the paper uncovers some alarming trends. One of the primary findings is that the number of people living in extreme poverty worldwide could be nearly doubled due to climate change. In all scenarios, Sub-Saharan Africa is projected to bear the brunt, contributing the largest number of poor people, with estimates ranging between 40.5 million and 73.5 million by 2050. Another significant finding is the disproportionate impact of inequality on poverty. Even small increases in inequality can lead to substantial rises in poverty levels. For instance, if every country’s Gini coefficient increases by just 1 percent between 2022 and 2050, an additional 8.8 million people could be pushed below the international poverty line by 2050. In a more extreme scenario, where every country’s Gini coefficient increases by 10 percent between 2022 and 2050, the number of people falling into poverty could rise by an additional 148.8 million relative to the baseline scenario. These findings underscore the urgent need for comprehensive climate policies that not only mitigate environmental impacts but also address socioeconomic vulnerabilities.
Journal
Journal Volume
Journal Issue

Related items

Showing items related by metadata.

  • Publication
    Downstream Impacts of Water Pollution in the Upper Citarum River, West Java, Indonesia : Economic Assessment of Interventions to Improve Water Quality
    (Asian Development Bank, Manila and World Bank, Washington, DC, 2013-10) Asian Development Bank; World Bank
    The Economics of Sanitation Initiative (ESI) of the World Bank's Water and Sanitation Program (WSP) commenced in East Asia and the Pacific region in 2006 to generate and disseminate economic evidence on sanitation. A phase one study in five countries of the region, including Indonesia, assessed the economic costs of inadequate sanitation to raise the profile of sanitation nationally. A phase two study compared the costs with the benefits of a range of sanitation intervention options in five physical locations in Indonesia, to assist decision makers in their choice of sanitation technology and delivery method. Since the demonstrated successes of ESI in the East Asia and Pacific region, ESI has become a global flagship program of WSP. However, some economic benefits have not been fully evaluated in monetary terms because of methodological difficulties in valuing nonmarket impacts, the paucity of underlying data sets, and the difficulties inherent in attributing observed impacts to poor sanitation. Among these hard-to-measure benefits are the impacts of poor sanitation on water resources. Hence, the purpose of this study was to develop and pilot test a specific methodology for valuing a wider range of impacts related to water resource pollution in Indonesia.
  • Publication
    Design and Implementation of Environmental Performance Rating and Public Disclosure Programs : A Summary of Issues and Recommendations Based on Experiences in East Asian Countries Experiences in East Asian Countries
    (2011-01-01) Gozun, Elisea G.; Laplante, Benoit; Wang, Hua
    A number of countries around the world have in recent years implemented environmental performance rating and public disclosure programs, and, where evidence is available, these programs have been shown to induce pollution reduction. Based on previous research and practical experiences from several Asian countries, this paper provides a systematic review and discussion of the practical issues involved in designing and implementing environmental performance rating and public disclosure programs, including the legal and institutional framework, scope and coverage determination, performance rating methodology, data collection and verification, disclosure strategy, credibility assurance, program set-up and expansion, etc. The authors offer comments and recommendations, where appropriate, for environmental regulators to tackle these practical issues. The reviews and discussions are intended to be concise, simple, and systematic, and alternative options are discussed in a succinct manner, so that they can be readily used by interested environmental regulators and researchers.
  • Publication
    Brazil Low Carbon Case Study : Waste
    (Washington, DC, 2010) World Bank
    This report synthesis the findings for the waste sector of a broader study, the Brazil low carbon study, which was undertaken by the World Bank in its initiative to support Brazil's integrated effort towards reducing national and global emissions of Greenhouse Gases (GHG) while promoting long term development. The purpose of the present report is to assist in the preparation of public policy proposals regarding GHG emissions and the additional financial resources necessary. The main purpose of the scenarios is to provide an evaluation of the GHG emissions arising from the different approaches and methods for treating waste and to ensure that important environmental aspects are taken into account when key decisions are being made on the waste treatment technologies to be applied in Brazil. The World Bank and covers four key areas with large potential for low-carbon options: 1) Land Use, Land-Use Change, and Forestry (LULUCF), including deforestation; 2) transport systems; 3) energy production and use, particularly electricity, oil and gas and bio-fuels; and 4) solid and liquid urban waste.
  • Publication
    Viability of Current and Emerging Technologies for Domestic Solid Waste Treatment and Disposal : Implications on Dioxin and Furan Emissions
    (Washington, DC, 2011-05) World Bank
    This study was undertaken to identify and assess the technologies available worldwide for treatment and disposal of municipal solid waste (MSW), and to make a general assessment of the applicability of these technologies to various waste management 'settings' within the Latin American and Caribbean (LAC) Region. Each technology was evaluated for a number of key attributes, including demonstrated commercial viability, economics, institutional factors, sustainability metrics, and environmental attributes, including emissions of dioxins and furans. The study focused on the waste treatment technologies that have been commercially demonstrated worldwide; however, selected alternative and emerging technologies were also considered. After profiling the available waste management technologies, an assessment was then made of the general applicability of these technologies to various characteristic settings found within the LAC region. Technology applicability assessment at specific locations within the LAC region will require detailed, site-specific evaluation. Such site specific evaluations of applicable technologies would be the subject of subsequent studies.
  • Publication
    Industrial Environmental Performance in China
    (World Bank, Washington, DC, 2000-02) Dasgupta, Susmita; Laplante, Benoit; Namingi, Nlandu; Wang, Hua
    Little empirical research has been done on monitoring and enforcement issues in environmental economics, especially to analyze the impact of monitoring and enforcement on polluters' environmental performance. No studies have been done in developing economies. The authors explore the impact of inspections, and the potential impact of pollution charges and citizens' complaints, on the environmental performance of polluters in China. Their analysis of plant-level data from the city of Zhenjiang shows that: 1) Inspections have a statistically significant impact on firms environmental performance. 2) Pollution charges do not have a statistically significant effect on firms performance - although the lack of variation in pollution charges in Zhenjiang precludes effectively capturing their impact. 3) Complaints have a significant impact on inspections and therefore on pollution control. Currently available data do not allow analysis of whether the cost of additional inspections is justified, but it is reasonable to speculate that additional inspections would improve social welfare in Zhenjiang, and that information and education campaigns are probably a good way to encourage citizen complaints.

Users also downloaded

Showing related downloaded files

  • Publication
    Argentina Country Climate and Development Report
    (World Bank, Washington, DC, 2022-11) World Bank Group
    The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.
  • Publication
    Global Economic Prospects, June 2024
    (Washington, DC: World Bank, 2024-06-11) World Bank
    After several years of negative shocks, global growth is expected to hold steady in 2024 and then edge up in the next couple of years, in part aided by cautious monetary policy easing as inflation gradually declines. However, economic prospects are envisaged to remain tepid, especially in the most vulnerable countries. Risks to the outlook, while more balanced, are still tilted to the downside, including the possibility of escalating geopolitical tensions, further trade fragmentation, and higher-for-longer interest rates. Natural disasters related to climate change could also hinder activity. Subdued growth prospects across many emerging market and developing economies and continued risks underscore the need for decisive policy action at the global and national levels. Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). Each edition includes analytical pieces on topical policy challenges faced by these economies.
  • Publication
    World Development Report 2006
    (Washington, DC, 2005) World Bank
    This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.
  • Publication
    Classroom Assessment to Support Foundational Literacy
    (Washington, DC: World Bank, 2025-03-21) Luna-Bazaldua, Diego; Levin, Victoria; Liberman, Julia; Gala, Priyal Mukesh
    This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.
  • Publication
    Lebanon Economic Monitor, Fall 2022
    (Washington, DC, 2022-11) World Bank
    The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.