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Thesis Spotlights – Greening Industrial Production in China: Reinvent a Cleaner Future through Policy, Strategy and Technology

Issue 45: Pandemic (Im)Possibilities vol. 1 Tue 2 Jun 2020

Yuan Zheng Li, PhD candidate, Canada

Institution: Department of Sociology, Université Laval, Canada
Time: 2009 – 2020
Supervisor: Louis Guay
Funding: Fonds de recherche Société et culture Québec, Institut Hydro-Québec en environnement, développement et société, Department of Foreign Affairs and International Trade of Canada, and China Scholarship Council

The largest greenhouse gas emitter with a fast-growing economy, China’s environmental actions have implications for the whole world. Beijing has imposed targets that require the industrial sector to reduce carbon emissions, and has strengthened its environmental protection law. Facing more stringent requirements, how have Chinese firms responded to environmental issues? What has driven eco-innovation in industrial companies?

Our study integrates ecological modernisation theory and the Porter hypothesis, to identify factors that influenced corporate environmental implementation and eco-innovation. The combined approaches aim to understand the role of social actors and the regulation-innovation nexus by investigating the “what”, “who”, “why”, and “how” questions of “going green” and adopting eco-innovation. The research employed Porter’s value chain and Mol’s triad-network models to elucidate implementation processes, focusing on strategic, managerial and technological dimensions in the socio-economic and political contexts in which the firms operated. A two-year survey (2013-2014) was conducted in over 100 firms in fifteen industry sectors in the Pearl River Delta region, known as the “world factory”. Our study includes primary and secondary sources, such as participant observations, interviews, and audit reports, to analyse environmental activities between 2012 and 2016. Mixed methods research has allowed the opening of, and peeking into, the “black box” of corporate behaviours, social dynamics, and interactions of key stakeholders.

Four major findings derive from the data analysis. First, a majority of the firms complied with laws. Larger enterprises, pollution-intensive companies, and export-oriented firms tended to take measures. Legislation, ethical reasons and economic concerns were the top three key drivers. Second, corporate responses revealed heterogeneity in actions. The companies adopted non-compliant, passive, active, and pro-active strategies. Four types of combinations were found in environmental management systems implementation. The more the firms engaged in such systems, the more likely they initiated concrete measures. Those companies which established both ISO14001 and in-house systems were the environmental forerunners. Third, most of the enterprises used end-of-pipe solutions, and some of them implemented cleaner technologies. A few firms adopted incremental innovation, and only a fraction of them undertook eco-innovation. Heterogeneous strategies led to different technological choices. They were categorised into four profiles including “laggard”, “adopter”, “follower”, and “eco-innovator”. The “laggard” did not have an environmental strategy nor took any measures; whereas the “eco-innovator” introduced a proactive strategy and developed new products. The “adopter” used abatement measures, and the “follower” adopted prevention technologies. Fourth, stricter regulation was a necessary but insufficient condition for eco-innovation, which is a multifactorial process driven by company-specific, social, institutional, and contextual determinants.

Our findings support some theoretical claims. The industrial firms made environmental progress. However, technology adoption was limited to one specific environmental issue-area. The win-win situation occurred in the enterprises with strong environmental commitments, high technological capacities, and substantial financial resources. The gap between policy-making and implementation persisted. Such findings were in line with prior studies. Instead of relying on ad hoc cooperation, policy-makers can scale up support by providing resources, engaging small and medium-sized businesses, and empowering members of communities. Future studies may expand the scope of this research by including diverse national contexts, in order to shed light on policy implementation and country-specific determinants.

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