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This paper studies how centralizing environmental administration affects air pollution in China. China launched a reform in 2016 to empower upper-level environmental protection bureaus to administer lower-level bureaus vertically through personnel control. Exploiting a stacked difference-in-differences strategy, we find that the reform significantly reduced air pollution. The effect was stronger in places where pollution was less likely to be affected by spillovers from other provinces, where local governments initially paid less attention to environmental protection, and where there was less economic importance. Further analysis shows that the reform reduced pollution by strengthening the pollution reduction incentives of local environmental officials, increasing the intensity of local environmental inspection, and promoting environmental compliance by polluting firms. [ABSTRACT FROM AUTHOR]

This paper examines the effects of extreme temperatures on mortality rates, using random year-to-year variation in temperature based on county-level panel data from China. The analysis finds a robust, U-shaped relationship between temperature and mortality rates, indicating that extremely cold or hot temperatures lead to excess deaths. The heat-related (cold-related) effect is 3.5 times (3.2 times) as large as previous findings that used U.S. data, and it is especially large for the elderly population, mainly due to excess deaths caused by cardiovascular diseases. Applying these results to climate change predictions from Hadley Centre Global Environmental Model shows that by 2061–2080 the annual mortality rate is likely to increase by 14.2% if global greenhouse gas emissions continue to rise throughout the 21st century, the estimated health cost of which is around 0.98 trillion Chinese Yuan per year. The paper also explores households' adaptation behaviors to extreme temperatures. It finds that although urban households adaptively increase energy consumption when they are exposed to cold temperatures and purchase more air conditioners on hot and cold days, rural households are unresponsive to temperature fluctuations. This finding implies that rural people may be more resource constrained and suffer more when extreme temperatures occur. [ABSTRACT FROM AUTHOR]

This paper exploits the information disclosure and dissemination of environmental punishments on housing prices. As environmental quality is hardly ameliorated in the short run, the environmental punishments normally convey bad news of environmental quality rather than good news to housing market. The information disclosure of environmental punishment adds new pollution source information to the public. Employing the micro databases of firm-level environmental punishments and housing resale transactions in Beijing from January 2015 to December 2017, this research reveals that the transaction prices of houses within 0.5 km distance from the environmentally punished firms decrease by 1.84% on average and the overlapping effects of environmental punishments are fortified by multiple environmental punishments. In addition, the negative effects are amplified in the heating seasons and in the national important events. Unfortunately, we find little evidence of environmental punishments in the rental housing market. This paper identifies three mechanisms of environmental punishments on housing prices. The first mechanism is information disclosure, which proves that the impacts of environmental punishments on housing prices magnify if the information of environmental punishments is released to the public and reinforce with environmental information searching. The second mechanism is information dissemination, which corroborates that the negative effects of environmental punishments on housing transaction prices decay with distance and over time. The third mechanism is health concern arising from environmental punishments, which documents that relative to the unmarried young homebuyers, the older homebuyers and homebuyers with children have stronger responses to the environmental punishments. [ABSTRACT FROM AUTHOR]

Plastic waste trade has grown considerably in the last decades and has led to severe environmental problems in recipient countries. Being the largest recipient, China has permanently banned the imports of plastic waste since 2018. This paper examines the causal effect of plastic waste imports on air pollution by exploiting China's experience of importing plastic waste and the recent import ban. By combining data on plastic waste imports with PM 2.5 data at the city level for the years 2000–2011, we find that plastic waste imports increased PM 2.5 density significantly in recipient cities. To evaluate the impact of the import ban on air quality, we employ daily data on air pollution between 2015 and 2020. Our difference-in-differences results show that affected cities, relative to other cities, experienced considerable improvement in air quality following the ban. Further analysis reveals that increased incineration of non-recycled waste is the main channel. These findings provide insights into the costs of importing plastic waste and the potential environmental gains from banning such imports in other countries. • We assess the environmental impact of plastic waste trade in the context of China. • Chinese cities that imported more plastic waste experienced an increase in PM2.5 density between 2000 and 2011. • The primary factor contributing to worsened air quality was the increased incineration of non-recycled waste. • China's import ban in 2018 effectively improved air quality. • The findings highlight the importance of designing effective policies to regulate international trade in waste and domestic waste management. [ABSTRACT FROM AUTHOR]

This paper estimates the mortality impacts of ozone pollution in China and the moderating effects of two possible adaptation strategies. Using an instrument variable constructed from ozone concentrations of nearby upwind cities, we find that ozone pollution significantly increases all-cause, cardiovascular, and respiratory mortality. Healthcare service provision significantly decreases the impacts of ozone pollution on all-cause and cardiovascular mortality, but does not moderate the impact on respiratory mortality. The impact of ozone on RES mortality declines after COVID-19. Healthcare service provision also reduces the distributional impact of ozone across the elderly and younger groups. Projection shows that climate change would induce mortality costs of 0.08% of China's GDP through increasing ozone pollution. [ABSTRACT FROM AUTHOR]

In this paper, we assess the effectiveness of early climate policy in emerging economies by causally evaluating the impact of China's Low-carbon City Pilot (LCCP) on city-level per-capita CO 2 emissions and CO 2 intensity of GDP over the period 2003–2017. The idiosyncrasies of the policy design pose significant challenges for causal identification, which we overcome within a synthetic control framework. Contrary to previous contributions, our results suggest that the LCCP had no significant impact on either carbon emissions or intensity. The main takeaway of our empirical investigation is that even in emerging economies, effective environmental policy requires transparent, quantifiable targets, and credible enforcement. [ABSTRACT FROM AUTHOR]

Policy interaction is an important way to deal with increasingly complex environmental problems. This paper examines the investment-related tax cuts and the policy interaction with environmental regulation on firms' emission reduction strategies. Taking China's value-added tax (VAT) reform as a quasi-natural experiment and considering the interaction with the emission reduction target policy, our difference-in-differences estimation shows that: the average effect of the VAT reform reduces firms' sulfur dioxide (SO 2) emission intensity by 16.6%, due to the adoption of emissions reduction strategies in the production processes; the interaction effect between the VAT reform and environmental regulation incentivizes firms to additionally reduce SO 2 emission intensity, due to the adoption of both production processes and end-of-pipe reduction strategies. Our findings are more evident for firms with tight financial constraints. Overall, this paper reveals the micro-mechanisms of how the tax policies incentivize firms to choose emission reduction strategies and highlights the importance of the interaction effects between environmental and non-environmental policies, thus providing implications for the policy mix of environmental regulation and tax-cut incentives to promote pollution reduction and improve business performance. [ABSTRACT FROM AUTHOR]

Severe air quality hurts human capital and threatens innovative outcomes. Using unique data containing 12.8 million patent applications in China, this paper examines the causal effect of particulate matter with a diameter of 2.5 μm or less (PM 2.5) on patent innovation. We estimate a two-stage least square model with thermal inversion as an instrumental variable. Our findings show that a one μg/m3 increase in the annual average PM 2.5 concentration leads to a 1.3% decrease in the number of patents. Annual fluctuations in PM 2.5 concentration levels across cities caused the total number of patents to decrease by 1.1% during the 2006–2010 period. From 2011 to 2015, the improvement in air quality increased the number by about 2.0%. It demonstrates another innovation co-benefit of improving air quality due to the tightened regulation. [ABSTRACT FROM AUTHOR]

Following market liberalization, the vehicle population in China has increased dramatically over the past few decades. This paper examines the causal impact of the opening of a heavily used high speed rail line connecting two megacities in China in 2015, Chengdu and Chongqing, on air pollution. We use high-frequency and high spatial resolution data to track pollution along major highways linking the two cities. Our approach involves the use of a novel augmented regression discontinuity in time approach that incorporates machine learning to inform our specification choice in the first stage. Our estimates show that CO is reduced by 6.4% and PM 2.5 by 7.1% along the main affected highway. These findings are supported using a difference-in-differences approach. [ABSTRACT FROM AUTHOR]

This paper examines the emission leakage by the regional environmental regulation applied in Beijing and its surrounding area. Using the unique firm-level daily emission data, we develop a novel model to estimate the size of immediate leakage through the price mechanism. Our empirics find that leakage offsets about 60% of the total amount of emission reduction in the regulated region and the aggregate emission reduction is less than two percent. We also use the iron and steel industry as an example to show how the prices of input and output factors respond to the regulation. [ABSTRACT FROM AUTHOR]

In this paper, we investigate the impact on air pollution of China's 2017 policy banning waste imports. We exploit a difference-in-differences strategy combining the time variation and cross-prefecture variation in waste imports before the policy change. We find that prefectures that imported waste in the prepolicy period experienced greater air quality improvements after the policy shock. This effect is stronger in regions with loose environmental regulations and poor waste utilization capacity. Further investigation shows that reductions in both the burning of unrecyclable waste and the level of industrial production are channels through which the waste import ban reduced air pollution. [ABSTRACT FROM AUTHOR]

This paper assesses mental health responses to information on environmental risks. We exploit the progressive implementation of a national program in China that introduces more comprehensive air pollution monitoring and provides real-time air-pollution information to the public. The program leads to a sharp increase in public awareness and attention to air pollution issues and results in a large increase in the sensitivity of individual's mental health to changes in air quality, especially among those with more exposure to pollution information and those more susceptible to mental illnesses. Information of worsening air quality has a direct effect on mental health as a source of stressors and an indirect behavioral effect through reducing outdoor activities and social integration. Our findings shed light on the design and delivery of environmental information disclosure programs, especially for countries with pressing environmental threats. [ABSTRACT FROM AUTHOR]

This paper studies the consequences of China's recent water pollution regulation. We find evidence that the regulation reduces pollution-intensive activity in highly regulated areas. Relative to the locations where regulations are more stringent (downstream cities), locations where regulations are less stringent (upstream cities) attract more water-polluting activity. As polluting activity concentrates upstream, a larger proportion of the river and more poor residents are exposed to high levels of pollution. [ABSTRACT FROM AUTHOR]

This paper uses detailed production data from a half million Chinese manufacturing plants over 1998–2007 to estimate the effects of temperature on firm-level total factor productivity (TFP), factor inputs, and output. We detect an inverted U-shaped relationship between temperature and TFP and show that it primarily drives the temperature-output effect. Both labor- and capital- intensive firms exhibit sensitivity to high temperatures. By mid 21st century, if no additional adaptation were to occur, we project that climate change will reduce Chinese manufacturing output annually by 12%, equivalent to a loss of $39.5 billion in 2007 dollars. This implies substantial local and global economic consequences as the Chinese manufacturing sector produces 32% of national GDP and supplies 12% of global exports. [ABSTRACT FROM AUTHOR]

Developing countries, including China, are just beginning to figure out how to balance economic development with the desire to address numerous severe environmental problems. In this paper, we use two enterprise-level data sets – China's Environmental Statistics Database and China's Industrial Enterprise Database – to estimate the impact of a more stringent wastewater discharge standard imposed on all the textile printing and dyeing enterprises in the Lake Tai, Jiangsu region, on labor demand. We find that enterprises which face this new more stringent standard decreased labor demand by approximately 7%. Furthermore, we find that the new standard had heterogeneous impacts on different types of enterprises. For example, our results indicate that the more stringent discharge standard reduced employment in domestically-owned private enterprises by 7.4%, but had little or no impact on state-owned or foreign-owned enterprises. [ABSTRACT FROM AUTHOR]

Climate change shifts the distributions of a set of climatic variables, including temperature, precipitation, humidity, wind speed, sunshine duration, and evaporation. This paper explores the importance of those additional climatic variables other than temperature and precipitation. Using the county-level agricultural data from 1980 to 2010 in China, we find that those additional climatic variables, especially humidity and wind speed, are critical for crop growth. Therefore, omitting those variables is likely to bias the predicted impacts of climate change on crop yields. In particular, omitting humidity tends to overpredict the cost of climate change on crop yields, while ignoring wind speed is likely to underpredict the effect. Our preferred specification indicates that climate change is likely to decrease the yields of rice, wheat, and corn in China by 36.25%, 18.26%, and 45.10%, respectively, by the end of this century. [ABSTRACT FROM AUTHOR]

This paper documents the environmentally induced behavioral biases in the land market and shows how buyers correct their biases by learning from repeated transactions. Using a sample of government land sales along two sides of the heating service line in China, we first show land parcels transacted in the south in the winter are associated with an average price discount of 7.1%, compared to transactions in the north where heating service is provided. We discuss three possible explanations, including projection bias, incorrect belief, and salience bias. We find adverse weather such as low temperature and extreme weather may trigger the mispricing in the absence of the heating service, lending support to the projection bias. Moreover, our empirical investigations suggest the local government, as the only land seller, responds weakly to such biases. We also provide suggestive evidence that individual buyers in the south can learn from prior experience. [ABSTRACT FROM AUTHOR]

This paper studies how the pollution reduction mandates imposed by China׳s central government in 2001 triggered unanticipated responses from its provinces. We apply the difference-in-differences-in-differences (DDD) method to a unique dataset on industry-level activities in counties along 24 major rivers in China from 1998 through 2008. We find that the most downstream county of a province has up to 20 percent more water-polluting activities than otherwise identical counties since 2001. Moreover, we find that the enforcement of pollution fee collection is more lenient in the most downstream county of a province, and that private firms contribute more to the downstream effect than state-owned enterprises and foreign firms. These findings are consistent with the hypothesis that the provincial governments respond to the pollution reduction mandates by shifting their enforcement efforts away from the most downstream county. [ABSTRACT FROM AUTHOR]

This paper uses unique data on daily air pollution concentrations over the period 2001–2010 to test for manipulation in self-reported data by Chinese cities. First, we employ a discontinuity test to detect evidence consistent with data manipulation. Then, we propose a panel matching approach to identify the conditions under which irregularities may occur. We find that about 50% of cities reported dubious PM 10 pollution levels that led to a discontinuity at the cut-off. Suspicious data reporting tends to occur on days when the anomaly is least detectable. Our findings indicate that the official daily air pollution data are not well behaved, which provides suggestive evidence of manipulation. [ABSTRACT FROM AUTHOR]

Abstract: The effect of roads on forests is ambiguous. Many studies conclude that building and upgrading roads increases pressure on forests but some find that new and better roads may reduce the rate of deforestation. In this paper we use satellite remote sensing images of forest cover in Jiangxi Province, China, to test whether the existence and the size of roads (ranging from expressways to tertiary roads) in 1995 affected the level of forest cover in 2000 or the rate of change between 1995 and 2000. To account for road access for each of our 1km2 (“pixel”) units of forest cover we measure whether or not and what type of roads penetrate the “watershed” in which the pixel lies. These watersheds allow more plausible measures of accessibility than do traditional “crowfly” distance measures that ignore topography. To account for possible confounding we also use 12 additional covariates: geographic and climatic variables (e.g., elevation, slope, rainfall, temperature, soil properties); demographic and economic variables (e.g., local population and GDP per square kilometer); and distance variables (e.g., distance to the nearest provincial capital). Although simple univariate OLS regressions show that forest levels are lower and deforestation rates higher either when there is a road, or when there is a higher quality road, these results are not robust. Controlling for all of the covariates and also using recently developed covariate matching techniques to estimate treatment effects, we find that roads in China’s Jiangxi Province can most safely be described as having no impact on the level of forests and no impact on the rate of deforestation. [ABSTRACT FROM AUTHOR]

Does it pay to be "greener" as a local official in China? In this paper, we examine the effect of local environment regulation outcomes, i.e., local pollution, on leaders' chances of promotion. This is an important question because only when the Chinese cadre evaluation system rewards local officials' green behaviors, these officials would move away from their past priority in promoting economic growth at all costs, so that the environmental crisis in China might be addressed. We collect party secretary data for Chinese counties between 2001 and 2014 to measure promotion patterns. We construct county-year SO2 and PM2.5 pollution measures using NASA satellite data. We adopt an instrumental variable approach to deal with potential endogeneity issues of the pollution variables: for both PM 2.5 and SO2, we use ventilation coefficient, i.e., the product of wind speed and mixing layer height, as the instrument. Our empirical analysis shows that for county party secretaries, those who are able to reduce air pollution are more likely to be promoted. We find similar results for county magistrates. However, we do not find evidence for this pollution-promotion link for prefecture and provincial party secretaries. [ABSTRACT FROM AUTHOR]

This paper estimates the causal effect of urban road expansion on Vehicle-Kilometers Traveled (VKT) in 103 Chinese cities. We develop a novel matching IV strategy to address endogeneity concerns that complements traditional historical infrastructure instruments to provide time-varying identification in a panel data setting. We find that the estimated elasticity of VKT with respect to road length is approximately 1, indicating that newly built urban roads lead to a proportional increase in total traffic. Given significant ongoing infrastructure investment and more recently enacted traffic alleviation policies in many Chinese cities, this result provides important new information on the impacts of infrastructure investment on traffic. [ABSTRACT FROM AUTHOR]