Negative Externalities of Domestic Environmental Protection: Evidence from China

• In Event: Environmental Governance in China

Abstract

This study investigates the impact of China's summer moratorium policy in the Exclusive Economic Zone (EEZ) on motivations for Illegal, Unreported, and Unregulated (IUU) fishing. Using data from the Automatic Identification System (AIS)—a tracking system that monitors maritime activities—we apply a regression discontinuity in time design to compare the relative amounts of fishing efforts on either side of China's EEZ boundary. Our findings show that the summer fishing moratorium policy has notably intensified incentives for international IUU fishing. At the onset of the moratorium, fishing motivations surged by 16%, but declined by 7% as the moratorium drew to a close. We further investigate why vessels from certain ports demonstrate stronger IUU motivations compared to others. We found that ports located near numerous islands are more prone to vessels engaging in international IUU fishing during the fishing moratorium period. These areas have a historical prevalence of pirate attacks. Our research indicates that stringent environmental protection policies can lead to international spillovers, and the vulnerability of state capacity is reflected in regulatory challenges. International linkage is more likely to occur in areas with weaker state capacity.

Authors

• Qin Liu, University of Macau

• Tao Li, University of Macau