Exploring the multidimensional effects of China's coal de-capacity policy: A regression discontinuity design

Coal phase-out is a key step for China to achieve carbon peak and carbon neutrality. The Chinese government introduced a coal de-capacity policy (CDP) in 2016. However, existing studies rarely discuss the effectiveness of China's implementation of the CDP, especially regarding the policy goal of “improving quality and increasing efficiency.” In this context, this study quantitatively evaluates the multidimensional effects of China's CDP in terms of economic efficiency, green production, and employee welfare using a sharp regression discontinuity design. Moreover, the spatial heterogeneity of policy effects is discussed through subsample analyses. The empirical results are as follows. First, the expected goal of the Chinese CDP has not been fully achieved. Although the CDP has achieved a significantly positive economic effect, the effectiveness of environmental benefits and social welfare remains far from ideal. Second, there is a statistically significant spatial heterogeneity in the CDP's multidimensional effects in different regions. Policy guidelines are proposed in line with the findings to support the adjustment and optimization of de-capacity policy measures for coal and other similar industries. This study thoroughly highlights the economic, environmental, and social effects of the CDP's implementation in China in 2016 and provides a periodical summary and assessment of policy effectiveness. Specifically, the findings provide valuable insights for designing coal de-capacity targets and plans for specific regions, which may help ensure better policy efficiency and feasibility in future coal capacity regulations.