IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i9p4808-d543069.html
   My bibliography  Save this article

Air Pollution Control: An Analysis of China’s Industrial Off-Peak Production Policy through the Quasi-Natural Experiment Method

Author

Listed:
  • Xindi Xu

    (Department of Environmental Science and Engineering, Fudan University, Shanghai 200438, China)

  • Qinyun Wang

    (School of Economics, Fudan University, Shanghai 200433, China)

  • Haichao Hu

    (School of Economics, Shanghai University, Shanghai 200444, China)

  • Xinjun Wang

    (Department of Environmental Science and Engineering, Fudan University, Shanghai 200438, China)

Abstract

To reduce frequent heavy air pollution, the Chinese government suspends clinker production during the heating season in most areas of the North, which is known as the Clinker Off-peak Production Policy. The questions regarding such a repressive production policy for environmental purposes are whether this policy is effective in reducing pollutants and whether the marginal cost is high. To explore these policy effects, a quasi-experiment is designed, taking advantage of spatial-temporal variations in policy implementation. With the triple-difference method and environmental satellite data, the effect on air pollution is estimated to be −1900 μg/m 2 (~2%) of SO 2 and −3200 μg/m 2 (~10%) of NO 2 . With daily price information and the difference-in-differences method, the market effect is estimated to be an approximately 10% increase in annual sale prices. The marginal cost estimated through a back-of-the-envelope analysis is 32 k RMB yuan/ton SO 2 or NO 2 , which is 24.88 times the pollutant discharge fee but which better reflects the pollutant shadow price.

Suggested Citation

  • Xindi Xu & Qinyun Wang & Haichao Hu & Xinjun Wang, 2021. "Air Pollution Control: An Analysis of China’s Industrial Off-Peak Production Policy through the Quasi-Natural Experiment Method," Sustainability, MDPI, vol. 13(9), pages 1-18, April.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:9:p:4808-:d:543069
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/9/4808/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/9/4808/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael Greenstone & Rema Hanna, 2014. "Environmental Regulations, Air and Water Pollution, and Infant Mortality in India," American Economic Review, American Economic Association, vol. 104(10), pages 3038-3072, October.
    2. John A. List & Daniel L. Millimet & Per G. Fredriksson & W. Warren McHone, 2003. "Effects of Environmental Regulations on Manufacturing Plant Births: Evidence from a Propensity Score Matching Estimator," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 944-952, November.
    3. Li, Pei & Lu, Yi & Wang, Jin, 2020. "The effects of fuel standards on air pollution: Evidence from China," Journal of Development Economics, Elsevier, vol. 146(C).
    4. Chen, Yuyu & Jin, Ginger Zhe & Kumar, Naresh & Shi, Guang, 2013. "The promise of Beijing: Evaluating the impact of the 2008 Olympic Games on air quality," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 424-443.
    5. Meredith Fowlie & Mar Reguant & Stephen P. Ryan, 2016. "Market-Based Emissions Regulation and Industry Dynamics," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 249-302.
    6. Lars-Hendrik Röller & Frode Steen, 2006. "On the Workings of a Cartel: Evidence from the Norwegian Cement Industry," American Economic Review, American Economic Association, vol. 96(1), pages 321-338, March.
    7. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    8. Dave Donaldson & Adam Storeygard, 2016. "The View from Above: Applications of Satellite Data in Economics," Journal of Economic Perspectives, American Economic Association, vol. 30(4), pages 171-198, Fall.
    9. Wang, Yun & Sun, Xiaohua & Guo, Xu, 2019. "Environmental regulation and green productivity growth: Empirical evidence on the Porter Hypothesis from OECD industrial sectors," Energy Policy, Elsevier, vol. 132(C), pages 611-619.
    10. Chen Yuyu & Jin Ginger Zhe & Kumar Naresh & Shi Guang, 2012. "Gaming in Air Pollution Data? Lessons from China," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(3), pages 1-43, December.
    11. Stephen P. Ryan, 2012. "The Costs of Environmental Regulation in a Concentrated Industry," Econometrica, Econometric Society, vol. 80(3), pages 1019-1061, May.
    12. Leslie A. Martin & Shanthi Nataraj & Ann E. Harrison, 2017. "In with the Big, Out with the Small: Removing Small-Scale Reservations in India," American Economic Review, American Economic Association, vol. 107(2), pages 354-386, February.
    13. Liao, Liping & Du, Minzhe & Chen, Zhongfei, 2021. "Air pollution, health care use and medical costs: Evidence from China," Energy Economics, Elsevier, vol. 95(C).
    14. Tetsuji Okazaki & Ken Onishi & Naoki Wakamori, 2022. "Excess Capacity And Effectiveness Of Policy Interventions: Evidence From The Cement Industry," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(2), pages 883-915, May.
    15. Olivier Deschênes & Michael Greenstone & Joseph S. Shapiro, 2017. "Defensive Investments and the Demand for Air Quality: Evidence from the NOx Budget Program," American Economic Review, American Economic Association, vol. 107(10), pages 2958-2989, October.
    16. Maximilian Auffhammer & Ryan Kellogg, 2011. "Clearing the Air? The Effects of Gasoline Content Regulation on Air Quality," American Economic Review, American Economic Association, vol. 101(6), pages 2687-2722, October.
    17. Buchanan, James M, 1969. "External Diseconomies, Corrective Taxes, and Market Structure," American Economic Review, American Economic Association, vol. 59(1), pages 174-177, March.
    18. Michael Greenstone, 2002. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1175-1219, December.
    19. Greenstone, Michael & Gayer, Ted, 2009. "Quasi-experimental and experimental approaches to environmental economics," Journal of Environmental Economics and Management, Elsevier, vol. 57(1), pages 21-44, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Na Zhang & Haiyan Wang & Baohua Yang & Muyuan Wu, 2023. "Evolutionary Game Mechanism of Governmental Cross-Regional Cooperation in AirPollution Management," Sustainability, MDPI, vol. 15(2), pages 1-21, January.
    2. Ana María Castañón & Lluís Sanmiquel & Marc Bascompta & Antonio Vega y de la Fuente & Víctor Contreras & Fernando Gómez-Fernández, 2021. "Used Tires as Fuel in Clinker Production: Economic and Environmental Implications," Sustainability, MDPI, vol. 13(18), pages 1-13, September.
    3. Xiaojing Jia & Xin Luo, 2023. "Residents’ Health Effect of Environmental Regulations in Coal-Dependent Industries: Empirical Evidence from China’s Cement Industry," Sustainability, MDPI, vol. 15(3), pages 1-16, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chen, Shiyi & Jiang, Lingduo & Liu, Wanlin & Song, Hong, 2022. "Fireworks regulation, air pollution, and public health: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 92(C).
    2. Andersen, Dana C., 2018. "Accounting for loss of variety and factor reallocations in the welfare cost of regulations," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 69-94.
    3. Olivier Deschenes & Kyle C. Meng, 2018. "Quasi-Experimental Methods in Environmental Economics: Opportunities and Challenges," NBER Working Papers 24903, National Bureau of Economic Research, Inc.
    4. Andersen, Dana C., 2016. "Accounting for Firm Exit and Loss of Variety in the Welfare Cost of Regulations," Working Papers 2016-9, University of Alberta, Department of Economics.
    5. Agarwal, Sumit & Ding, Yanhao & Kuang, Weida & Zhu, Xiao, 2023. "Are environmental punishments good news or bad news? Evidence from China," Journal of Environmental Economics and Management, Elsevier, vol. 120(C).
    6. Christopher Hansman & Jonas Hjort & Gianmarco León, 2015. "Firms' Response and Unintended Health Consequences of Industrial Regulations," Working Papers 809, Barcelona School of Economics.
    7. Christopher Hansman & Jonas Hjort & Gianmarco León, 2019. "Interlinked firms and the consequences of piecemeal regulation," Journal of the European Economic Association, European Economic Association, vol. 17(3), pages 876-916.
    8. Curtis, E. Mark, 2020. "Reevaluating the ozone nonattainment standards: Evidence from the 2004 expansion," Journal of Environmental Economics and Management, Elsevier, vol. 99(C).
    9. Zou, Eric, 2017. "Unwatched Pollution: The Effect of Incomplete Monitoring on Air Quality," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258274, Agricultural and Applied Economics Association.
    10. Joseph E. Aldy & Maximilian Auffhammer & Maureen Cropper & Arthur Fraas & Richard Morgenstern, 2022. "Looking Back at 50 Years of the Clean Air Act," Journal of Economic Literature, American Economic Association, vol. 60(1), pages 179-232, March.
    11. Xin Zhang & Xun Zhang & Yuehua Liu & Xintong Zhao & Xi Chen, 2023. "The morbidity costs of air pollution through the Lens of Health Spending in China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(3), pages 1269-1292, July.
    12. Aldy, Joseph E. & Auffhammer, Maximillian & Cropper, Maureen L. & Fraas, Arthur G. & Morgenstern, Richard D., 2020. "Looking Back at Fifty Years of the Clean Air Act," RFF Working Paper Series 20-01, Resources for the Future.
    13. Ann E. Harrison & Ben Hyman & Leslie A. Martin & Shanthi Nataraj, 2015. "When do Firms Go Green? Comparing Price Incentives with Command and Control Regulations in India," Working Papers WR-1133, RAND Corporation.
    14. 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).
    15. Ann Harrison & Benjamin Hyman & Leslie Martin & Shanthi Nataraj, 2015. "When do Firms Go Green? Comparing Command and Control Regulations with Price Incentives in India," NBER Working Papers 21763, National Bureau of Economic Research, Inc.
    16. Maoyong Fan & Qu Tang & Jianxin Wu & Junji Xiao, 2023. "Unintended environmental consequences of place‐based economic policies," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(1), pages 291-315, January.
    17. Liu, Duan & Yu, Nizhou & Wan, Hong, 2022. "Does water rights trading affect corporate investment? The role of resource allocation and risk mitigation channels," Economic Modelling, Elsevier, vol. 117(C).
    18. Jonathan Colmer & Ralf Martin & Mirabelle Muûls & Ulrich J. Wagner, 2020. "Does pricing carbon mitigate climate change? Firm-level evidence from the European Union emissions trading scheme," CEP Discussion Papers dp1728, Centre for Economic Performance, LSE.
    19. Fernando Broner & Paula Bustos & Vasco Carvalho, 2011. "Sources of comparative advantage in polluting industries," Economics Working Papers 1331, Department of Economics and Business, Universitat Pompeu Fabra, revised Dec 2019.
    20. Kong, Dongmin & Liang, Junwei & Liu, Chenhao, 2022. "Invisible enemy: The health impact of ozone," China Economic Review, Elsevier, vol. 72(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:9:p:4808-:d:543069. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.