Application of a system dynamics approach for assessment of the impact of regulations on cleaner production in the electroplating industry in China

Compared with pollution transfer, cleaner production (CP) is more effective to reduce heavy metal pollution in many less developed countries. However, it’s more difficult to develop an efficient policy to make enterprises to completely invest in CP. This paper analyses the effects of CP policies on investment decisions of firms using a dynamic systems model and by simulating a typical electroplating enterprise in Shenzhen, China. Results show that water price could be effective only when it is increased by a sufficient amount. For instance, only when it is increased directly from 2 to 8 CNY/m3 (0.3–1.2 USD/m3), or from 8 to 16 CNY/m3 (1.2–2.5 USD/m3), will an enterprise gradually increase CP investment from process modification to recovery technology. Increasing the metal utilization rate of CP standard-plating and surface finishing industry from its current value of 75%–85% would encourage an enterprise to add recovery technology. Uniform preferential tax rate and penalties for the three parts of CP do not affect investment decisions on CP. Using the same investment subsidy rate for the three parts of CP could be effective in promoting CP only if it is above 60%. The current emission standard of metal has played a role in promoting CP. A comparison of three possible strategies indicates that a distinct policy for the different parts of CP is the optimal policy combination. An overall investigation of typical enterprises based on the abovementioned framework is suggested to make more practical policies, which than can promote CP instead of pollution transfer.