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Impact of Energy Structure Adjustment and Environmental Regulation on Air Pollution in China: Simulation and Measurement Research by the Dynamic General Equilibrium Model

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  • Wu, Xianhua
  • Deng, Huai
  • Li, Hua
  • Guo, Yiming

Abstract

In recent years, the average concentration of PM2.5 in China's air pollution has generally declined, but literature discussing reasons for the decline are scarce. This study provides an explanation of the reasons for the decline in China's air pollution through theoretical model construction and simulation. Firstly, a DGE (Dynamic General Equilibrium) model, including time and space dimensions, is used to describe the mechanism for energy structure adjustment and environmental regulation affecting air pollution in China. Secondly, the parameters of the theoretical model are adjusted for simulation. The simulation results show that the government environmental control has positive policy effect, both in reducing air pollution and in promoting economic growth, while energy structure adjustment only works in curbing air pollution. Further simulations found that the effectiveness of government environmental control depends on whether there are regional differences in policy implementation and the choice of policy paths. Thirdly, panel data from 286 cities at prefecture level and above in China from 2010 to 2018 verified the simulation. The empirical results verified the availability of government environmental control and energy structural adjustment in improving air quality. From the analysis of heterogeneity, the government environmental control showed better air pollution control effect in big cities, and the policy effect of government environmental control was gradually improving over time. The following policy implications are proposed: research on alternative energy sources, adjustment of energy structure, and the coordinated development of government environmental control in various regions are the main strategies for improving air quality. Adopting the "fast first and then slow" governance policy, designing the "north first and then south," and "heavy first and lighter" air pollution control measures can achieve better control effects.

Suggested Citation

  • Wu, Xianhua & Deng, Huai & Li, Hua & Guo, Yiming, 2021. "Impact of Energy Structure Adjustment and Environmental Regulation on Air Pollution in China: Simulation and Measurement Research by the Dynamic General Equilibrium Model," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    • Handle: RePEc:eee:tefoso:v:172:y:2021:i:c:s004016252100442x
    DOI: 10.1016/j.techfore.2021.121010
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