Small Firms and the Environment in Developing Countries

Small firms - including 'microenterprises' and 'small and medium enterprises' (SMEs) - play a vital economic role in developing countries. They typically provide half of all jobs. In addition, they foster entrepreneurship and help key sectors adapt to changing market conditions. In light of these benefits, programs promoting small firms have become a cornerstone of economic development policy. Increasingly, however, scholars and policymakers are also exploring the link between small firms and the environment. The first compendium of research and policy analysis on this topic, this book is organized around three questions: How important is small firm pollution? Will forcing small firms to comply with environmental regulations exacerbate unemployment and poverty? And what policy options are available to control small firm pollution? Eleven case studies from China, Ecuador, Honduras, India, Malaysia, and Mexico address these questions. They compare the environmental damages caused by small firms and large ones. They explore the positive and negative economic consequences of pollution control strategies focusing on small firms, the administrative challenges of regulating thousands of firms which are often unregistered and unknown to the government, and they describe innovative approaches for persuading small firms to implement effective pollution controls. The case studies cover a variety of industrial sectors including ceramics, leather tanning, textiles, and agro-industry, and evaluate a wide range of environmental management strategies that include encouraging collective action among small firms, creating economic incentives for pollution control, and helping small firms adopt clean technologies and environmental management systems. Many of the chapters are groundbreaking, addressing topics new to the literature?for example, the role of international trade in greening small firms, and funding small firm pollution control projects by linking them to efforts to stem global warming. Highly readable, Small Firms and the Environment in Developing Countries is a valuable text for courses in development policy and economics that have an environmental component or focus. It will also prove of interest to development workers, policymakers in developing countries, and students and scholars of environmental policy and law.

Allen Blackman is a Senior Fellow at Resources for the Future. He specializes in the economics of the environment in developing countries.

Introduction -- Allen Blackman The Benefits and Costs of Controlling Small-Firm Pollution: Informal Brickmaking in Ciudad Ju rez, Mexico -- Allen Blackman, Stephen Newbold, Jhih-Shyang Shih, David A. Evans, Joseph Cook, and Michael Batz Small-Scale Industry, Poverty and the Environment: A Case Study of Ecuador -- Peter Lanjouw Policy Options for Controlling Small-Firm Pollution: Informal Brickmaking in Northern Mexico -- Allen Blackman Economic Incentives for Cleaner Small and Medium Enterprises: Evidence from Malaysia-- Jeffrey R. Vincent and G. Sivalingam Improving Environmental Performance of Small Firms through Joint Action: Indian Tannery Clusters -- Loraine Kennedy Using Supply-Chain Networks to Help Small and Medium-Sized Enterprises Adopt Environmental Management Systems: The Guadalajara Environmental Management Pilot -- Kulsum Ahmed Clean and Competitive? Small-Scale Bleachers and Dyers in Tirupur, India -- Michael Crow and Michael B. Batz Small Firms and Clean Technologies Part I: Informal Brickmaking in Ciudad Ju rez, Mexico -- Allen Blackman and Geoffrey J. Bannister Small Firms and Clean Technologies Part II: Leather Tanning in Le n, Mexico -- Allen Blackman Small-Scale Agroindustry, Trade, and the Environment: Coffee Processing in Honduras -- Robert R. Hearne, Jos Manuel Gonzalez, and Bruno Barbier The Ancillary Carbon Benefits of SO2 Reductions: A Small-Boiler Policy in Taiyuan, People's Republic of China -- Richard Morgenstern, Alan J. Krupnick, and Xuehua Zhang Conclusion -- Allen Blackman