Advancing nuanced pollution control: Local improvements and spatial spillovers of policies on key enterprises.

ABSTRACT

This paper examines the impact of air pollution control policies targeting key polluting enterprises, highlighting a strategic shift towards precision pollution control that concentrates on high-emission, high-risk businesses. The paper explores the efficacy of these policies and their potential spatial spillover effects, utilizing panel data from 259 Chinese cities from 2013 to 2021. Employing the difference-in-differences (DID) model and spatial Durbin model, the study analyzes both the direct local effects and the broader spatial consequences of these regulatory measures on air quality. The findings indicate a significant reduction in air pollutant concentrations in urban areas, attributing this improvement to factors such as industrial restructuring, increased investment in science and technology, and economic growth. Spatial econometric analysis further reveals a substantial positive correlation in air quality among Chinese cities. However, estimates of the spillover effect indicate that while such policies successfully reduce pollution locally, they could unintentionally degrade air quality in adjacent areas. The study highlights the need for nuanced policy strategies to mitigate unintended spatial spillovers and enhance overall effectiveness. It recommends tailored policies that integrate environmental and socioeconomic objectives, national and regional coordination for consistent enforcement, technology-driven compliance strategies, and incentives for sustainable enterprise practices.