Pollutant reduction effects of vertical environmental reform in China.

ABSTRACT

The vertical environmental reform in China has led to the change of environmental management system from territorial management model to vertical management model. This study uses the data of 263 prefecture-level cities in China to examine the effects of China's vertical environmental reform on pollutant emissions, including industrial sulfur dioxide, wastewater emissions, and industrial fumes emissions. The findings demonstrate that vertical environmental reform resulted in a reduction in industrial sulfur dioxide, wastewater emissions, and industrial fumes emissions. And the governance effects is gradually enhanced with the passage of time, which are long-lasting effects. The above conclusions are still valid after a series of robust estimates including mitigating selection bias, placebo test, changing the dependent variables, and mitigating heterogeneous treatment effects. According to heterogeneity analysis, the vertical environmental reform has reduced the increase of pollutants caused by financial pressure and official associations, and treats border pollution problems more effectively. Under the decentralized governance system, the implementation of vertical environmental management helps to reduce local pollutant emissions. This conclusion provides the latest evidence from China for the academic debate on the advantages and disadvantages of territorial environmental management and vertical environmental management and also provides policy implications for the government's environmental governance.