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Less pollution under a more centralized environmental system: Evidence from vertical environmental reforms in China

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  • Han, Chao
  • Tian, Xian-Liang

Abstract

This paper investigates the effects of a series of environmental centralizing reforms (the so-called vertical environmental reforms) in China on polluting firms' SO2 emission. Using manually collected data on when/where the reforms took place, we conduct the analysis in a difference-in-differences framework, controlling for a rich set of fixed effects and selection variables on the reforms. Our empirical results show that after the reforms, Chinese polluting firms have undergone a 10.6% abatement in SO2 emission; and their installed coal boilers have decreased by 9.6%. The firms that are important employment and tax-revenue providers in local economy experience more decrease in their SO2 emission. Using geo-information on firms' location, we also find that the firms close to county borders are more affected by the reforms.

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  • Han, Chao & Tian, Xian-Liang, 2022. "Less pollution under a more centralized environmental system: Evidence from vertical environmental reforms in China," Energy Economics, Elsevier, vol. 112(C).
    • Handle: RePEc:eee:eneeco:v:112:y:2022:i:c:s0140988322002808
    DOI: 10.1016/j.eneco.2022.106121
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    More about this item

    Keywords

    Pollution; SO2; Centralization; Environmental system; Vertical reform; China;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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