Abstract
As China’s economic development enters a transitional stage, the government has put forward higher requirements for efficient air pollution control. Different from the traditional environmental regulation methods, China’s carbon market pilots (CMP) can use market mechanism to achieve carbon emission reduction policy goals while also providing more efficient control methods for air pollution. Using the unique daily air pollution data of 324 prefecture-level and above cities in China from December 1, 2013, to December 18, 2017, and matching them with the daily data of carbon allowance trading in each CMP, we employ the time-varying difference-in-differences (DID) method to explore the casual relationship between CMP and air pollution, and its influence mechanism. Our results show that (1) the establishment of CMP can reduce air pollution by at least 4.9%, especially on sulfur dioxide, inhalable particulate matter, fine particles, and carbon monoxide. This conclusion is still robust after we use the instrumental variable (IV) method to deal with endogeneity. (2) Mechanism analysis shows that the reducing effect of CMP on air pollution is achieved mainly through three channels, including energy consumption reducing, technological progressing, and industrial structure upgrading. (3) Since CMP have just been established, government regulation plays a stronger role than the market mechanism in the process of CMP affecting air pollution. However, with the continuous improvement of CMP, the market mechanism has also played an increasingly important dynamic effect.
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Data availability
The datasets used or analyzed during the current study are available from the corresponding author on reasonable request.
Notes
The data is summarized on the website: https://www.aqistudy.cn/historydata/.
In fact, these periods are the end of the performance period mandated by the government. There will be more rigorous proof later.
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This work was supported by the Graduate Innovation Fund of Shanghai University of Finance and Economics (No. CXJJ-2020-310).
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All authors contributed to the study conception and design. Material preparation, data collection, and analysis were performed by Xing Li, Zhigao Hu, and Jianhua Cao. The first draft of the manuscript was written by Xing Li, and all authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.
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Li, X., Hu, Z. & Cao, J. The impact of carbon market pilots on air pollution: evidence from China. Environ Sci Pollut Res 28, 62274–62291 (2021). https://doi.org/10.1007/s11356-021-14995-z
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DOI: https://doi.org/10.1007/s11356-021-14995-z