On the co-evolution of PM2.5 concentrations and income in China: A joint distribution dynamics approach

This paper examines the long-run relationship between income and PM2.5 concentrations using a joint distribution dynamics approach. This approach is applied to a unique panel data of PM2.5 concentrations and income for 285 Chinese cities over the period 2000–2018. Both static and dynamic distribution analyses show that poverty-environment trap exists in terms of PM2.5 concentrations among Chinese prefectural and above (PAA) level cities. However, this effect cannot be observed between income and other two pollutants (SO2 and CO2 emissions). The analyses indicate that multiple equilibria are the major characteristics in the long-run relationship between income and PM2.5 concentrations in China. Thus, new environmental models are expected to be developed to explain this new stylized fact. The findings provide strong support for taking more aggressive measures that consider income and urban environment simultaneously to reduce poverty and air pollutions together in the Chinese cities.