Small manufacturing plants, pollution, and poverty: new evidence from Brazil and Mexico

Susmita Dasgupta, Robert Lucas and David Wheeler

No 2029, Policy Research Working Paper Series from The World Bank

Abstract: The authors use new data from Brazil and Mexico to analyze relationships linking economic development, the size distribution of manufacturing plants, and exposure to industrial pollution. For lack of data, prior work in this field has been limited largely to water pollution and medium-size plants. This study examines air pollution and encompasses small plants (with 1 to 20 employees) as well as medium-size and large plants. Four main questions are addressed (with answers from plant-level data): a) Are small plants more pollution-intensive than large facilities? Clearly, yes. b) Are there proportionately more small plants in low-income regions? The answer is yes, in thousands of Brazilian municipalities. Small plants dominate poor regions and are a relatively low source of employment in high-income areas. c) Is industry more pollution-intensive in low-income regions? In Brazil, yes. For each municipality, the authors estimate the share of the six most pollution-intensive ("dirty") sectors in total industrial activity. They find that the dirty-sector share declines continuously with increases in municipality income per capita. d) Do poor areas suffer more than wealthy areas from industrial air pollution? Paradoxically, no. The risk of mortality from industrial air pollution is much higher in the top two income deciles among Brazil's municipalities and the great majority of projected deaths is attributable to emissions from large plants.The scale of large-plant emissions dominates all other factors. Lower-income areas suffer much less from industrial air pollution in Brazil, despite the greater emissions-intensity of smaller plants and the prevalence of smaller plants in lower income areas.

Keywords: Water and Industry; Environmental Economics&Policies; Sanitation and Sewerage; Public Health Promotion; Health Monitoring&Evaluation; Environmental Economics&Policies; Water and Industry; Health Monitoring&Evaluation; Sanitation and Sewerage; TF030632-DANISH CTF - FY05 (DAC PART COUNTRIES GNP PER CAPITA BELOW USD 2; 500/AL (search for similar items in EconPapers)
Date: 1998-12-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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