Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 414: Public Disclosure of Industrial Pollution: The PROPER Approach for Indonesia?
Jorge García López, Thomas Sterner and Shakeb Afsah
Additional contact information
Jorge García López: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Thomas Sterner: Resources for the Future, Washington, D.C.
Shakeb Afsah: consultant in Washington, D.C.
Abstract: This paper evaluates the effectiveness of the Program for Pollution Control Evaluation and Rating (PROPER) in Indonesia. PROPER, the first major public disclosure program in the developing world, was launched in June 1995; though it collapsed in 1998 with the Asian financial crisis, it is currently being revived. There have been claims of success for this pioneering scheme, yet little formal analysis has been undertaken. We analyze changes in emissions concentrations (mg/L) using panel data techniques with plant-level data for participating firms and a control group. The results show that there was indeed a positive response to PROPER, especially among firms with poor environmental compliance records. The response was immediate, and firms pursued further emissions reductions in the following months. The total estimated reductions in biochemical oxygen demand (BOD) and chemical oxygen demand (COD) were approximately 32%.
Keywords: environmental policy; pollution control; public disclosure; Asia; Indonesia
23 pages, December 8, 2009
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