Does freight structure transformation improve air quality?–Evidence from China's “shifting freight from truck to rail” policy

China proactively reshaped its freight system to combat air pollution from the transportation sector. This paper focuses on the “Shifting Freight from Truck to Rail” (SFTR) policy, and examines the environmental consequences of expanding railway transport system while curbing heavy trucks in road freight. Combine the high-frequency air pollution data with meteorology data, utilizing the augmented regression discontinuity in time-series (RDiT), we found that the implementation of SFTR led to a respective decrease of 13.9 %, 12.5 %, and 4.2 % in the concentrations of PM2.5, PM10, and NO2 in the Bohai Rim region. Our empirical findings withstand an alternative specification of generalized difference-in-differences (DiD) method and a series of robustness checks. Preliminary calculations indicate that the health and economic output benefits of SFTR in the Bohai Rim region amount to approximately $24.99 billion, with the cost of expanding freight railway infrastructure and firms’ compliance cost totaling $4.05 billion.