Environmental performance for the long term industrial
competitiveness: A system dynamic study of Chinese Cement
Industry.
Xu Honggang and Steve Arquitts
Human Settlement Division
Asian Institute of Technology
hsp67251 @ait.ac.th; arquitts@ yahoo.com
In the developing countries where the supply is usually in shortage and prices re usually
distorted, short-term profits of the industry alone can create a wrong perception of its
productivity. On the contrary, environmental performance, which can be composed
without little impacts of price system, can serve as one of the major reliable indicators of
the industrial competitiveness. Large amount of emission of pollution indicates a waste of
raw material, a potential of low labor productivity and external conflicts. In the long run,
heavy polluting companies usually lose its competitiveness. However, the indicator of the
environmental performance is largely ignored due to strong popular misconceptions that
a trade-off between the environment and economic development is unavoidable and that
the nominal profit of the industry is over-emphasized of as the industrial productivity
indicator. When the polluting industries are forced to improve the production efficiency
because of the market competition in the long run, the overall social welfare loss has been
very high. Not only surrounding residents have been suffering by the pollutants and the
consumers are forced to pay high prices, the producers can be forced out of the industry.
Chinese cement industry has traditionally been identified one of the major industrial
polluters. When some environmental regulations are enforced and complaints from the
damaging residents endangers the continue production, some end-point treatment
facilities are selected by majority of cement factories although two relative clean and
efficient technologies innovating the production process are available: the dry-production
process and the non-bag package of the end product. The expansion of the cement
production capacity has still been relying on the traditional technologies: wet-production
process and bag package of the end product. Competitiveness of the cement industry
declines and cement industry becomes a new problem in the face of globalization of
Chinese economy.
A system dynamic model is introduced to search the operational policies to effectively
use the indicators of environmental performance in cement industrial development.
CC BY-NC-SA 4.0