1. School of Agricultural Economics and Rural Development, Renmin University of China, Beijing 100872, China; 2. School of Economics, Renmin University of China, Beijing 100872, China; 3. School of Environment and Natural Resources, Renmin University of China, Beijing 100872, China; 4. Chinese Academy of Environmental Planning, Ministry of Ecology and Environment, Beijing 100012, China
Abstract：Based on the panel data of 278 prefecture cities in China from 2007 to 2016, this study levages arguably exogenous variation in the Ambient Air Quality Standard Reform in 2012 and employs a multi-time point DID model to identify the impact, transmission mechanism, and heterogeneity of environmental quality monitoring authority on air pollution. We find that the reform significantly reduces SO2 emissions and PM2.5 concentration. The emission reduction effect is positively correlated with the density of state-controlled monitoring sites. Importantly, the result remains consistent after a series of robustness tests, including placebo tests and the exclusion of other external policy impacts. Moreover, mechanism analysis uncovers two channels, namely the stringency of local government environmental regulations and green innovation of industrial enterprises, through which the reform curbs air pollution. Strategies such as limiting the number of industrial enterprises and increasing public transportation investment have proven effective in suppressing air pollutant emissions. Lastly, heterogeneity analysis shows that the air pollution reduction effect is more significant in cities with larger initial emissions and higher fiscal decentralization levels, although such effect is smaller in cities with higher fiscal pressure.
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