The government capacity on industrial pollution management in Shanxi province : A response impulse analysis

This study employs the Vector Auto-regression model with Generalized Response Impulse Function to analyse the dynamic nexus between economic growth and the industrial environmental pollution intensity for six specific pollutants in Shanxi province of China from 1995 to 2015. The result show there exists bi-directional effects, with stronger impact running from economic development to industrial pollution is stronger. We also find the Shanxi government shows significant capacity in the management of industrial solid waste and waste gas. The provincial government has higher capacity in controlling Sulfur Dioxide compared to soot/dust. Our results verify the existence of Environmental Kuznets Curve through dynamic interactions between industrial pollution intensity and economic growth impulse. Three out of the six environmental pollution intensity responses are in the shape of inverted U curve. There are exceptions for three pollutants: N curve for Chemical Oxygen Demand and U curve for solid waste and waste gas.