Sustainable Governance of the Korean Freight Transportation Industry from an Environmental Perspective

Yongrok Choi, Haohao Wang, Fan Yang and Hyoungsuk Lee
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Yongrok Choi: Department of International Trade, Inha University, Incheon 22212, Korea
Haohao Wang: Department of International Trade, Inha University, Incheon 22212, Korea
Fan Yang: Program in Industrial Security Governance, Inha University, Incheon 22212, Korea
Hyoungsuk Lee: Business School, Shandong University, Weihai 264209, China

Sustainability, 2021, vol. 13, issue 11, 1-14

Abstract: The transportation industry is one of the major sectors for air pollution. In particular, the freight transportation sector possesses the biggest share of air pollution in South Korea. Therefore, it is required to evaluate current environmental performance of this sector and predict regulation impact on the local economy for a sustainable future. Based on the sustainable governance, each local government should take actions or change the paradigm of the regulatory policies. Thus, this study examines the environmental performance of the freight transportation industry with air pollution of PM 2 .5 and NO x in 16 Korean local governments, based on the non-radial directional distance function (NDDF). On average, the freight transportation sector shows very low performance with a high potential value of 0.649. Furthermore, no significant uptrend was witnessed during the sample period (2012 to 2017), implying a lack of sustainable governance. Some local governments such as Seoul (0.9301) and Busan (0.9709) show high efficiency, and Gwangju shows a slow but increasing trend, while most of other cities are very low in their environmental performance of freight transportation industries. Even Seoul and Busan may not maintain their sustainable performance, because outperforming high sales revenue in these cities could lead to high efficiency even with high levels of aggravating air pollution. Therefore, it is meaningful to empirically test the sustainable feasibility in terms of regulatory costs, reflecting the opportunity costs to select increased regulation toward a sustainable, higher environment-friendly efficiency. Environmental regulation causes very low, negligible costs in most of the local governments, except Seoul, implying that a more regulatory regime will bring in the sustainable governance of the environmental efficiency (Porter hypothesis) for the freight transportation sector for these local governments. However, Seoul will endure a heavy economic burden if heavier environmental regulations are posed on its freight transport sector. Stepwise and fine tuning of regulations is required for Seoul. In contrast to Seoul, Incheon needs drastic reformation since it shows low efficiency with low regulatory cost.

Keywords: particulate matter (PM) 2.5; freight transportation industry; directional distance function; environmental efficiency; regulatory cost (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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