Achieving sustainable growth and improving people’s livelihood have always been the two major concerns of the Chinese government. The current mode of economic development in China is typified by high growth, energy consumption, and pollution characteristics, and this has caused great stress on both energy consumption and the environment [1
]. Environmental issues and employment issues bear the brunt. Since the new century, China’s industrialization process has accelerated and has shown the basic characteristics of the post-industrial era. The manufacturing industry is at the industrial center and at the core of maintaining stable economic development. However, development of the manufacturing industry inevitably brings about deterioration of the environment. Focusing on solving outstanding environmental problems, prevention and control of the source, and environmental pollution such as air pollution, water pollution, soil pollution, and solid waste pollution have become increasingly prominent in social and economic development. In turn, the country’s industrial structure and employment situation are affected. Since the 1990s, China’s employment elasticity has remained at a low level, and the employment situation has become increasingly severe. In 2013, the pollution level of almost all industries of recent decades reached their peak, and this also aroused the government’s high concern. Under the guidance of the dual national policy of environmental protection and energy conservation, the problems of resource waste and pollution emissions in dirty industries and the phenomenon of breaking the ecological balance have been greatly alleviated.
Based on this, this paper intends to explore the “win–win” approach to sustainable development and people’s livelihood from the perspective of China’s manufacturing industry, from the three dimensions of environment, economy, and employment. Taking the interaction between environmental performance and employment in China’s manufacturing industry as the starting point of research, based on the industry’s perspective, we aim to explore how to conduct environmental management scientifically and effectively, and propose policy opinions and suggestions according to the differences of the industry. Through a combination of quantitative and qualitative research, a dynamic model is built to simulate the long- and short-term effects of environmental performance and employment in both clean and dirty industries, to deepen the understanding of this interactive shock response process.
Regarding whether sustainability and economic benefits can be mutually beneficial, domestic and foreign scholars are in disagreement. At the beginning, the mainstream academic circles were restrained, that environmental regulation inhibited the growth of economic benefits by increasing the production cost of enterprises and the price of labor factors [2
]. Some researchers verified similar conclusions through the choice of companies in the chemical, petroleum, pulp and paper, and furniture manufacturing industries [3
]. In addition to reducing the economic output by reducing industrial output, environmental regulation also has a negative impact on economic efficiency through the decline of industrial productivity. Barber and Mc Connell used the US chemical, paper, and other polluting industries as research objects, and found that the increase in investment in environmental governance during 1960–1980 led to a decline in industrial productivity, with the largest decline reaching nearly 30% [5
]. Dufour et al., Gollop and Robert, Gray and Shadbegian, Boyd and Mc Clelland have reached similar conclusions in their research into the power, paper, petroleum, and steel industries [6
]. Conversely, some scholars support environmental performance to promote economic growth by improving output or increasing productivity. Boyd and Mc Clelland pointed out that environmental regulation may lead to a reduction in potential output but, at the same time, there may be a coexistence of increased output and reduced pollution, thereby achieving a win–win situation for environmental protection and economic growth [10
]. Hamamoto confirmed it through research on company’s technological innovation activities [13
]. It is recommended that companies combine cleaner production and environmental management to increase the results of sustainable innovation and financial gain [14
]. However, such results do not apply to all regions. Martin et al. found that the impact of the implementation of the United Kingdom’s energy tax on manufacturing output was not significant. Environmental productivity and corporate efficiency are found greater for export-oriented firms [15
]. Brannlund et al. found that environmental regulation was negatively correlated with the productivity of some enterprises, but that some companies’ productivity was not significantly related to environmental regulation [16
]. Lanoie, Lajeunesse and Patry found that there was a lag in the impact of environmental performance on firm productivity [17
], where technical change was the main driver of most total factor productivity growth [18
]. Due to the introduction of the North American Free Trade Agreement (NAFTA), Grossman and Krueger introduced the relationship between environmental and economic growth with an inverted “U” curve [19
]. Shafik and Bandyopadya also found that the indicators of per capita income and air pollutants also showed an inverted “U” relationship [20
]. This conclusion has a certain similarity with Kuznets’ proposed Kuznets curve, so the above relationship can also be called the environmental Kuznets curve [21
]. A specific characteristic of the curve is that the environmental quality will show an inverted U-shaped trend with economic growth, that is, the environmental quality will gradually deteriorate and then gradually improve [22
]. Domestic scholars have taken the data of various industries in China as the research object and also discover the differences, interactivity, lag and complexity of environmental regulation and the industrial growth impact mechanism [24
Following the rise of the so-called “green economy” paradigm, research has mainly focused on the relationship between the rise of the green economy and the effects on creation of new opportunities of green employment [29
]. So, can environmental performance drive employment growth? Summarizing the existing viewpoints, the employment effects of environmental regulation can be roughly classified into three types: scale effect, substitution effect, and the uncertainty effect brought by technological innovation [30
]. The scale effect, that is, environmental regulation, places enterprises in an unfavorable competitive position in the world by increasing the production cost of enterprises and increasing the cost of pollution control and, thus, the labor demand is reduced. The early research is more inclined to take this view. Henderson and Greenstone believe that environmental regulation will lead to a reduction in production scale due to the increase in production costs which, in turn, will lead to a decrease in employment in the industry, that is, environmental regulation will have a negative effect on employment in the industry [31
]. The Environmental Pollution Costs and Expenses Report (PACE), written by the US Census Bureau in 1993, also validates this conclusion. The substitution effect, that is, environmental regulation, makes enterprises more inclined to use labor factors instead of price-enhancing resource-type elements due to the increased price of resource-based elements. Bezdek, Shimer et al. verified this conclusion [33
]. According to the World Labor Report published in 2009, moderate environmental regulation can achieve the two goals of improving environmental conditions and stimulating labor demand, and achieving the dual dividend of ecological environment and employment stability. It is also called the “double dividend hypothesis”. Chen also found that environmental performance achieved employment growth through the substitution relationship between pollutant elements and labor factors [37
The impact of environmental change on employment, as triggered by technological change, has greater uncertainty. The first is promotion theory, including the typical “porter hypothesis” and “double dividend” [42
]. Pianta and Vivarelli conducted statistical analysis on 21 departments in 5 countries, including Italy, Finland, Norway, Germany, and Denmark. The innovation activities of enterprises have a positive effect on overall employment. Innovation will lead to employment decline in a short time, but only within the department [43
]. According to Krugman and Young, the increase in labor factors and capital factor inputs will not continue to stimulate economic growth, and sustainable economic growth comes from continuous innovation [44
]. Material productivity improvements are found to receive targeted public financial support for realizing eco-innovations [45
]. The second is suppression theory, where it is believed that environmental governance will lead to the emergence of new sectors, which will lead to the gradual decline of the traditional sector, and thus lead to structural unemployment [46
]. The third is comprehensive theory. At different stages of development, the effects of different strengths and different purposes of environmental regulation on employment in different industries and industries of different scales are also very complicated. First, the impact mechanisms of different industries are different [48
]. Some scholars have also found that in the process of green energy, environmental regulation has a negative impact on employment in manufacturing industries with high energy consumption, and has a positive impact on employment in the electricity, gas and water production, and supply industries [49
]. From a macro perspective, the impact of environmental regulation on employment is not only reflected in the number of jobs but, in many cases, it will show changes in the distribution of employment in different industries, and there are significant differences between different industries. There are also some scholars who analyze the problem from the perspective of the structure of the employed [3
]. Since environmental regulation has always been guided by green innovation, its development orientation has a green and sustainable basis, that is, employment or industry meets the requirements of low carbon emissions, energy conservation, environmental protection, and pollution reduction. Taking China’s manufacturing industry as an example, the formulation and implementation of environmental regulation has greatly promoted the development of a typical “green industry” in the comprehensive utilization of waste resources. A similar law of labor mobility will also occur as an interdepartmental microenterprise. At different stages of development, the comprehensive impact mechanism of environmental regulation on employment will also change, and some scholars have verified the U-shaped relationship between the two [53
In summary, the correlation between environmental performance and employment differ according to the existing research. Foreign studies mainly focus on the needs of enterprises in developed countries, and the research is increasingly theoretical, detailed, and empirical, while the domestic relationship between environmental regulation and employment in the industry is rarely mentioned. There are few studies and the subjects are relatively one-sided and, in empirical research, the main focus is on static analysis methods. This paper takes the development of environmental regulation and employment in China’s manufacturing industry as the starting point of the research, based on the perspective of industry, and aims to explore how to carry out environmental regulation scientifically and effectively. Through the combination of quantitative and qualitative research, we explore the dynamic impact response process of the environmental performance of the clean industries and the dirty industries on employment, and deepen understanding of the interaction between the two. Strengthening the depth and breadth of theoretical research has great practical significance for how to scientifically and effectively carry out environmental performance and green management.
This paper selects the environmental performance indicators of 32 industries in China’s manufacturing industry in 2006–2015, and constructs a panel vector autoregressive model to study the interaction between environmental performance, industry scale, and industry employment. The following conclusions are drawn.
For clean industries, the waste gas utilization capacity affects the scale effect of total employment by changing the industrial output, but this effect will be weakened, and the waste gas utilization capacity will positively affect employment. The impact will increase over time, and the scale effect will be offset, possibly due to labor mobility or technical effects of the second occupation resulting from waste gas utilization, since there is an inverse relationship between firm productivity and pollution emissions [67
]. At the same time, low energy consumption and high waste solid treatment capacity can be achieved in clean industries. On the other hand, the stronger the waste gas utilization capacity, the higher the energy consumption, indicating that the waste gas utilization process in clean industries is accompanied by energy consumption. Employment has a negative impact on the ability to dispose of waste.
For dirty industries, the impact of energy consumption and other variables is no longer significant. The impact of industry output value and pollutant treatment capacity is more significant, especially in wastewater treatment. Compared with clean industries, the positive correlation between sales value and employment in dirty industries is shorter and the impact is relatively smaller. However, the growth of employment still leads to a small decrease in wastewater discharge capacity and solid waste utilization rate, which is the result of the combination of scale effect and environmental performance. On the contrary, the ability of wastewater treatment has driven the employment growth of the industry. On the one hand, it is attributed to the change of employment structure and, on the other hand, it has also benefited from the transformation of dirty industries.
Since this paper is based on the industry perspective, the selected data indicators are limited to the relevant data of the manufacturing industry. The existing statistical data are limited, and the years of the available indicators are limited. Therefore, the limitation of the sample size in the study may affect the reliability and validity of the model. On the other hand, the conclusions of the cointegration and Granger causality tests are only a statistical estimate and not a true causal relationship, and cannot be used as a basis for affirming or negating causality. Therefore, in future research, investigation of the economic principles behind the research results is still necessary.