Environmental Engineering Reference
In-Depth Information
tive technologies in China, these limits included,
rst and foremost, the lack of strategic
and consistent Chinese government policies that aimed to achieve environmental and
energy-technology leapfrogging.
7
In addition, China had weak technological capabilities,
and MNCs were unwilling to transfer cleaner or more e
fi
cient technologies beyond those
required by standards. She concludes that, for China to leapfrog to the technological fron-
tier of clean automobiles, '[A] coherent, concerted, consistent, and long-term e
ort of
government, industry, and civil society cooperation' would be required (ibid., p. 10).
ff
Pollution halo: do MNCs diffuse good environmental management to domestic firms?
Beyond transferring clean technology and good environmental management to their
a
liates, MNCs can create a 'pollution halo' by di
ff
using good environmental manage-
ment to domestic
rms. One of the primary channels is through the supply chain; that is,
MNC requirements that suppliers meet their internally set environmental standards.
Environmental management training opportunities for suppliers accelerate di
fi
ff
usion.
Another channel is the demonstration e
ff
ect. Domestic
fi
rms may voluntarily copy foreign
fi
rms, while host-country governments may adopt MNC standards as local regulation. A
third channel is upstream markets, that is,
fi
rms and consumers who purchase more eco-
e
cient MNC products, thus raising the overall level of environmental performance in
the country. A fourth channel is industry collaboration to promote better environmental
management in developing countries through self-regulation. Examples include the
Responsible Care Program of the chemical industry and the Electronics Industry Code of
Conduct.
What is the evidence that 'pollution halos' exist? Evidence in support of the pollution
halo hypothesis is provided by Eskeland and Harrison (1997). Using energy use per unit
of output as a proxy for energy emissions, they found that foreign ownership was associ-
ated with cleaner and lower levels of energy use in the three countries of their sample
(Mexico, Venezuela and Côte d'Ivoire). A study by Blackman and Wu (1998) also found
signi
cant support for the conclusion that foreign investment in electricity generation in
China increased energy e
fi
ciency and reduced emissions. The primary reason is that FDI
targeted advanced generating technologies. Better management and the introduction of
competition are also part of the halo e
ect.
A number of other studies, however, have found no signi
ff
fi
cant e
ff
ect of foreign owner-
ship or
fi
nancing. In a study of Mexican foreign and domestic manufacturing
fi
rms,
Dasgupta et al. (1997) found that 'OECD in
fl
uence' did not a
ff
ect the degree of
fi
rm 'envi-
ronmental e
ort was measured by two variables: the adoption of
ISO 14 000 type procedures and the use of plant personnel for environmental inspection
and control. Using survey methodology, the researchers found that new technology was
not signi
ff
ort'. The degree of e
ff
cantly cleaner and there was no evidence that plants with new equipment had
better environmental performance.
What did matter to environmental performance in Mexico was the size of the plant and
multi-plant status (larger size and multi-plant
fi
fi
rms were positively correlated with more
e
ort), recent experience of regulatory pressure (inspections), and public scrutiny. For
company compliance with its own internal environmental guidelines, the most important
variable is strong regulation. The foreign connection in general was not signi
ff
fi
cant. 'We
do not
cant role for any OECD linkage: multinational own-
ership, trade, management training, or management experience' (ibid., p. 18).
fi
nd', they conclude, 'a signi
fi
