ANALYSIS ABOUT THE EFFECTS OF INDUSTRIAL PRODUCTIONS ON AIR POLLUTION
Lu Li, Zhaowei Liu
ECON508: Applied econometrics
May 10, 2013
In China, many environmental problems have been ignored when it mainly focused on a higher pace of economic growth for a long time. In this paper, we aim at finding the relationship between air pollutions and its potential contributor—industrial development. And we are also interested in finding out which department in industry contributes most to air pollution. With these questions, it is essential for us to bring our analysis into a practical and comprehensive content. In this paper, we choose air pollution indicators and industry output in provincial level, thus we would like to test it based on different regions. We use the fixed effect model to construct the data and use hypothesis testing to testify our model through three characteristics: normality, heteroskedasticity and autocorrelation. After the regression and test, we come to the conclusion that basically our model is an appropriate one although several data and time series problems limit its further accuracy. And what is more, the result is quite accordance with our assumption that industrial sectors do effect the environment to some extent and among all the sectors we discuss, mining is the most overarching element. In order to obtain a better and more convincing result, we still need more information about air quality in our further study and research.
Keywords: air pollution; industrial sector
Chapter 1 Introduction
1.1 Identification of the research problem
“It was a foggy day in London, and the fog was heavy and dark. Animate London, with smarting eyes and irritated lungs, was blinking, wheezing, and choking; inanimate London was a sooty specter, divided in purpose between being visible and invisible, and so being wholly neither.”1 The great smog described by Dickens in London has already become a history. However, it happened as an unexpected coincidence in Beijing, exactly 60 years after London’s Great Smog of 1952, the worst case of air pollution in British history. At the beginning of 2013, Beijing was being affected as heavy fog, pollution and dust storms envelope large parts of northern China. This news has aroused widely concerned, with respect to the relationship between industry development and environment protection. As we all know, economic development and environmental protection have always been remained as cumbersome issues for the academic community. There is a general agreement that most of the air pollution is contributed by industrial sector. According to the estimation of Environmental Protective Agency, up to 50% of the American pollution is caused by industry.2 Hence, is it the same situation in China? Is the accession towards industry still solid and grounded? And if it was the truth, which part of the industrial products should take the majority responsibility of the air pollution? In order to getting answers of these questions, this paper takes advantages of panel data in Chinese industry, from 2003-2011, to make an empirical study on the relationship between economic growth and pollution emissions, also to test the relationship of different industry pollution emissions and the economic growth. 1.2 Literature review
According to the definition given by EPA (Environment Protection Authority), air pollution occurs when the air contains gases, dust, fumes or odor in harmful amounts. That is, amounts which could be harmful to the health or comfort of humans and animals or which could cause damage to plants and materials.” In addition, Industrial pollution is a pollution which can be directly linked with industry, in contrast with other pollution sources. During the process of manufacturing and producing, there will be certain gas emission. By specifying environment departments of several provinces of...