The effect of environmental regulation on air quality: A study of new ambient air quality standards in China

• Published in: Journal of cleaner production Vol. 215; pp. 268 - 279
• Main Authors: Wang, Kunlun, Yin, Hongchun, Chen, Yiwen
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01-04-2019
• Subjects: Air pollution; Air quality standards; Difference-in-differences (DID); Environmental regulations; Natural experiment; Air pollution; Air quality standards; Difference-in-differences (DID); Environmental regulations; Natural experiment
• ISSN: 0959-6526; 1879-1786
• DOI: 10.1016/j.jclepro.2019.01.061

Fine particulate matter is becoming a primary component of air pollution in China, damaging public health and economic growth. Although environmental regulation is an important instrument to control air pollution, studies on the effect of environmental regulation are mixed. Do environmental regulations help improve the air quality in urban centers, and what mechanism explains their effects in China? In order to explore the causal relationship between environmental regulations and air quality, the effectiveness of the New Ambient Air Quality Standards—primarily the monitoring of PM2.5—was evaluated using the Difference-in-Differences (DID) method to weaken the endogeneity problems. Our results suggest that the New Standards reduce the concentration of PM2.5 and emissions of SO2 in pilot cities in neither the short-term nor the long-term. Our heterogeneous analyses show that the monitoring efforts, pollution control efforts, and ownership structures can affect outcomes of New Standards significantly, and that they have different influences on various categories of pollutants. Our paper implies that the Chinese government should make more efforts beyond setting up environmental regulations.
•The average treatment effects in treated group of New Standards on SO2 and PM2.5 are zero.•Monitoring efforts and pollution investments can reduce SO2 in treated group, but will not affect PM2.5.•The effect of New Standards will be weakened for SO2 and PM2.5, in areas with high proportion of state-owned economy.•A reason for an ineffective environmental regulation is that its heterogeneous effects caused by regional features.