Economic and environmental impacts of pollution control regulation on small industries: a case study

Adoption of technology for abatement of pollution and improved production process is almost mandatory now in the industrial sector for protecting the global environment. Various environmental regulations are being implemented in the industries in the third world. However, the small-scale industry components of the industrial sectors, which contribute significantly to total pollution, are yet to adopt such abatement technology on a wide scale. High initial investment cost for abatement technology has been a crucial reason in this regard. Under that circumstances, the early adopters of abatement technology gained an advantage in the competitive market by increasing their net return per unit of production for being able to calculate correctly the actual benefits of such investment. The non-adopters who lacked such knowledge lost out in the competition. The present paper tries to investigate the impact of air pollution control regulation on secondary lead smelting industry in the unorganized sector in two urban wards within the city of Kolkata in India. The results showed that the units after adopting the abatement technology were able to receive positive net return from the additional investment on control device and also benefited the society and the environment at large. The total economic value consisting of all these benefits has been found to be highly significant. Thus, the result is instructive for the non-adopters and may encourage them to adopt the abatement technology for themselves as well. (c) 2005 Elsevier B.V. All rights reserved.