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National economic policy and industrial pollution - the case of Indonesia : 1975-1989 (Inglês)

The paper attempts to contribute to the study of appropriate regulation, and macroeconomic policy reform which may inappropriately stimulate environmentally damaging activities, examining the linkages required between the macro-economy, and the environment. It reviews the impact of policy on Indonesia's industrial pollution since 1975. Section II presents the best available evidence on sectoral pollution intensities, highlighting the difference across sectors, and pollutants. Section III provides a brief overview of the country's macro-policies during 1975-1989. Drawing on the pollution intensities described initially, Section IV examines the impact of policy on the estimated growth, and regional distribution of industrial pollution. The discussion pays particular attention to the impact of the economic reforms begun in 1983, and structures debate on the issues of: the extent if any, of economic reforms affecting pollution intensity of industrial production due to altered sectoral composition of manufacturing output; on the evidence if any, that reforms exerted an influence on industrial location, thus altering the impact of the associated pollution; and, on whether the protection of industry showed a "brown" bias, by favoring more pollution-intensive sectors. Section V summarizes the findings, and its implications for macroeconomic/environmental policy analysis.

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