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Unwatched pollution reduction: The effect of natural gas utilization on air quality

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  • Kuang, Yunming
  • Lin, Boqiang

Abstract

Experiencing extremely severe and persistent haze pollution in the past several years, China is among the world's most polluted countries with air pollution. As a relatively clean fossil fuel, natural gas is considered as a transitional energy for China's green and low-carbon development. Can natural gas use really improve air quality effectively? It is an important question but remains unanswered because of an estimation endogeneity. A major challenge in estimating this unwatched pollution reduction is how to accurately and cleanly identify the air quality impact from natural gas utilization in urban environments. This paper tries to provide comprehensive estimates for this problem. Based on a national policy of trans-regional natural gas allocation, this paper employs differences-in-differences method to identify the net effects of natural gas utilization on air quality in Chinese cities. Our estimates imply that PM2.5 concentrations in treatment group cities decreased by about 12% after the natural gas pipeline construction. The mechanism analysis shows that natural gas utilization has a substantial impact on urban haze pollution mainly through the improvement of the industrial energy mix and the change in urban household gas fuels. Furthermore, natural gas utilization can bring a co-benefit of reducing other typical air pollutants. The findings can provide new insights to the role of natural gas utilization in China's green and low-carbon development.

Suggested Citation

  • Kuang, Yunming & Lin, Boqiang, 2023. "Unwatched pollution reduction: The effect of natural gas utilization on air quality," Energy, Elsevier, vol. 273(C).
    • Handle: RePEc:eee:energy:v:273:y:2023:i:c:s0360544223006412
    DOI: 10.1016/j.energy.2023.127247
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