Changes In Environmental Pollution And Economic Development In Wuxi City

Since the adoption of the reform and opening-up policy, the contradiction between economic development and environmental pollution has become more and more serious with the highly-rapid economic growth in China. It is apparent that China's economic growth is accompanied by huge environmental losses. In order to transfer economic development mode, control environmental pollution and strengthen the construction of environmental protection institutions, it is necessary to study how environmental pollution changes and how economic development influences changes in environmental pollution. Using EKC analysis and decomposition analysis approach, this dissertation conducts an empirical research on the relationship between environmental pollution and economic development in Wuxi City from 1991 to 2005.First of all, this paper defines several fundamental concepts, and illustrates relevant theories. It gives definitions and interpretations to several concepts including economic development, environmental pollution, environmental Kuznets curve and sustainable development. Then, it expounds the environmental effects of proximate variables——economic scale, economic structure, and technology progress, as well as underlying variables such as consumption preference, income inequality and environmental regulations, which can only have an effect via the proximate variables. The evolution path of environmental quality along with economic development is the results of changes in all these variables.Secondly, this papaer conducts study on the overall relationship between environmental pollution and economic development. The causal relationship between them is examined by performing Granger causality tests. Then it estimates evolution paths of environmental pollution along with economic development by using fixed-effects model with cross-section specific coefficients, and verifies the environmental Kuznets curve hypothesis. Based on these analyses, three main conclusions have been drawn. (1) Economic development causes changes in environmental pollution in Wuxi City, while the latter is not the Granger reason for the former. (2) There exist remarkable differences in environmental impacts of economic development among Urban Districts, Jiangyin and Yixing, thus each region owns its unique evolution path of pollution. (3) In Jiangyin, solid waste pollution and waste gas pollution follow inverted-U evolution paths, which is consistent with the EKC hypothesis. These results suggest that the trend that environmental pollution rises with increasing incomes will reverse beyond certain income levels. In Urban Districts and Yixing, the evolution paths of all environmental pollution indicators (except Yixing's waste gas) exhibit U-shaped curves. The levels of GDP per capita at the trough turning points of these curves are so low that environmental quality in these two regions has become worsen since the early 1990s. Furthermore, factor decomposition analysis and regional decomposition analysis on changes in environmental pollution are carried out. The paper calculates contributions of three proximate variables (economic scale, economic structure, and technology progress) to changes in pollution for each region. Then, an integrated decomposition model is established to calculate contributions of each variable in each region to changes in environmental pollution of Wuxi City. Based on decomposition analysis, it compares environmental effects of economic development between every two regions, and explains the underlying causes of evolution paths of environmental pollution in each region. The results indicate that environmental pollution in Wuxi City mainly results from the expansion of economic scale in Urban District and Jiangyin. Increases in industrial solid waste production and industrial waste gas emissions are mainly from Jiangyin, while increases in industrial waste water emissions are mainly from Urban Districts. Although the contributions of changes in economic structure and technology progress are very low, they alleviate the intensity of pollutant emissions.Finally, some policy suggestions are put forward. These suggestions include transferring economic development mode, upgrading industrial structure, adopting clean production technology and improving environmental regulations.