Environmental Productivity in China

Environmental problems are threatening China's sustainable future. China began implementation of several environmental policies for the late 1970s and stringency of the regulations is increasing over time. We utilize a province-level economy wide data set over 1987-2001 to measure various components of productivity within a joint production model, which considers both market and environmental outputs. While productivity level of a joint production is relatively constant over time, environmental productivity decreased, especially during the periods of 1991-1994. This was a period of significant improvements in the economy and productivity for the Chinese market. This inescapable fact directs our attention to a conventionally neglected dimension of productivity, i.e., the less efficient utilization of pollution abatement technologies.