The spatial effect of fiscal decentralization on haze pollution in China

Government fiscal decentralization and haze and carbon reduction: Evidence from the fiscal Province-Managing-County reform

Government governance reform is not only a vital motivation for high economic quality but also an important factor in stimulating the government's environmental governance responsibility. The article empirically examines the fiscal Province-Managing-County (PMC) pilot reform on the synergic governance of haze and carbon reduction and its mechanism. The results show that the policy helps to realize the synergic governance of haze and carbon reduction, and the reform of fiscal Province-Managing-County promotes regional haze and carbon reduction mainly through structural effect, innovation effect, and fiscal expenditure responsibility effect. The heterogeneity analysis shows that the policy has an asymmetric effect on haze and carbon reduction under different administrative structures, economic structures and levels of government intervention. Further analysis shows a policy linkage effect between this policy and the Green Fiscal Policy. The policy has the situation of blood-sucking in the provincial capital city and leads to an increase in financial funds. The above results prove that the policy can help to realize haze and carbon reduction and provide practical ideas for the further expansion of the policy. At the same time, it provides the direction for the local government to realize the double-carbon goal.

The role of Chinese-style fiscal decentralization in promoting synergistic carbon and haze governance: insights from technological innovation

The reduction of haze and carbon emissions is extremely important for promoting sustainable development, improving air quality, enhancing health, and mitigating climate change. However, there is not enough research available on the impact of fiscal decentralization in China on the management of carbon and haze reduction. In order to thoroughly examine the effects of Chinese-style fiscal decentralization on the synergy between haze reduction and carbon reduction in different provinces, this study utilizes a dynamic spatial panel Durbin model using Han-Phillips Generalized Method of Moments (GMM) estimation and a multi-scale geographically and temporally weighted regression model. Our findings indicate that the eastern region consistently takes the lead in reducing haze and achieving carbon synergy. Fiscal technology decentralization has a direct positive impact and spatial spillover effect on carbon haze synergy with significant inverted U-shaped characteristics. These effects primarily arise from the promotion of technological innovation through fiscal technology decentralization. Furthermore, the influence of decentralizing fiscal technology expenditures on the degree of synergy between haze mitigation and carbon reduction varies significantly across China's provinces, both spatially and temporally. This entails promoting coordination between fiscal decentralization and policies related to haze and carbon emission reduction and encouraging information sharing, technology exchange, and collaborative projects between different regions to create a synergistic linkage effect. This will help achieve joint development and environmental protection goals in all regions. The discoveries carry significant consequences for directing the synchronized administration of haze and carbon and can serve as a solid basis for governmental decision-making aimed at enhancing air quality and attaining carbon neutrality through collaborative actions and policies.

How does financial decentralization synergies carbon reduction and pollution control in China?

This study looks at how carbon reduction, pollution management, and monetary decentralization in China all work together for a win-win situation. Since China is the most significant contributor to global warming, the country must implement policies to cut carbon emissions and curb pollution. One possible answer is financial decentralization, delegating federal financial responsibilities, and decisions to state and regional governments. The study used the weighted matrix analysis technique, LM matrix analysis technique, and ARDL short-run and long-run analysis estimates. However, the degree to which it will help China reduce carbon emissions and regulate pollution is unclear. This study takes a multifaceted approach to the investigation of this problem. Determining the efficacy of financial decentralization in addressing environmental concerns and drawing policy implications for China's environmental governance framework requires investigating the drivers of this trend and the mechanisms through which it operates. We perform a comprehensive empirical analysis to examine the results of using Chinese data from 1999 to 2019. This study's results provide new information to the literature by showcasing the power of fiscal decentralization in propelling environmentally sound policies in China. Central policy takeaways from the report include decentralizing financial authority to local governments, encouraging cooperation across multiple tiers of government, and setting up effective systems for monitoring and enforcing compliance. These policy suggestions can help China decrease carbon emissions and regulate pollution more efficiently, paving the way to better environmental results and a more sustainable future.

The pollution control effect of regional integration: An empirical study based on Urban Agglomeration Planning in China

Regional integration is an important trend of economic development worldwide, which helps to break the restrictions of administrative divisions on economic development and pollution control. According to the relevant theories of environmental economic geography, regional integration will have an important impact on regional pollution control. Based on China's urban panel data, we empirically tested the impact of regional integration on regional environmental pollution and its mechanism by using econometric analysis methods, such as the difference-in-differences model and the mediating effect model. We found that regional integration can effectively reduce urban pollutant emissions and that the emission reduction effect of regional integration is characterized by significant heterogeneity at different pollution levels. The mechanism analysis showed that the green technology innovation effect of regional integration is an important mechanism for promoting urban emission reduction. The conclusions of this paper enrich the relevant theories of environmental economic geography and provide new ideas to implement integration strategies to promote sustainable economic development in developing countries.

How does the opening of China's high-speed rail affect the spatial mismatch of haze pollution and economic growth?

A better reconciliation of haze pollution and economic growth has become the social consensus in China. The development of China's economy and air quality will be significantly impacted by its efforts to create high-speed rail (HSR). Based on panel data from 265 prefecture-level cities in China from 2003 to 2019, this paper investigates how the opening of HSR affects the spatial mismatch of haze pollution and economic growth by using the spatial mismatch index model, multi-period difference-in-differences (DID) model, and intermediary effect model. We find that the spatial mismatch in China has an overall decreasing trend. And its spatial agglomeration is dominated by low levels. Further empirical analysis shows that HSR opening can effectively restrain the spatial mismatch. Even after some robustness tests and endogenous treatment, the conclusion is still valid. In addition, population density, FDI, and industrial structure are also explicit factors affecting the spatial mismatch. Second, there is significant heterogeneity in the impact. This is reflected in the fact that HSR opening can suppress the spatial mismatch of service-oriented cities and the eastern region, while other cities and regions have no noticeable effect. Third, spatial transfer of haze pollution (STHP) and balanced development of economic growth (BEG) are two important conduction paths for the opening of HSR to affect the spatial mismatch. Specifically, HSR opening can constrain the spatial mismatch by inhibiting STHP and BEG. Based on the above findings, recommendations related to promoting a better harmony between haze pollution and economic growth are proposed.

The land finance and eco-product value nexus: Evidence from fiscal decentralization in China

This study aimed to shed new light on the land finance and eco-product value nexus from the perspective of fiscal decentralization, using data collected from 276 Chinese prefectures between 2005 and 2020. We employed a two-way fixed effects model to explore land finance, fiscal decentralization, and the eco-product value nexus. Our findings revealed that land finance has a noticeable disincentive influence on eco-product value. The impact of land finance on the ecological value of wetlands is much higher than on that of other land types. Additionally, fiscal expenditure decentralization plays a negative regulatory role between land finance and eco-product value. This effect is further strengthened with an increase in the fiscal decentralization level. Our findings suggest that standardizing local government land-granting behavior and making land finance more ecologically friendly through policy implementation will effectively contribute to the sustainable development of China.

Exploring the Interrelationships between Public Health, Fiscal Decentralization, and Local Government Debt in China

This paper investigates the interrelationships among local government debt, fiscal decentralization, and public health. The investigation begins by constructing a theoretical model to analyze the inherent connections between these variables. Subsequently, an empirical analysis is conducted using data from China between 2015 and 2021. The findings demonstrate a bidirectional relationship between fiscal decentralization, local government debt, and public health. Specifically, it is observed that an increase in local government debt has adverse effects on both fiscal decentralization and public health, while fiscal decentralization has a positive impact on public health. These insights are consistently validated through rigorous regression methodologies, affirming the robustness and significance of these relationships.

Role of financial decentralization on carbon taxation and carbon emission: Way forwards for economic recovery

The study intends to assess the role of financial decentralization on carbon taxation and carbon emission to recommend the way forwards for economic recovery. To estimate the nexus, study applied the cointegration analysis technique, CGE estimation model, long-run analysis using t-CGE model, and robustness analysis technique on Chinese data. Research findings declare that financial decentralization has significant role on extending the carbon taxation in China and financial decentralization supported 14.92% to expand carbon taxation throughout the Chinese industries. In such industries, pollution emission industries are the top of the list including transportation industry and other manufacturing companies. Overall, manufacturing industries size is about 78% and 11% size of transportation industry is included. Correspondingly, the findings also revealed that financial decentralization supports climate change mitigation with 29% and carbon taxation limits carbon emission with 44% in Chinese industries. Study directs to the stakeholders to enhance carbon taxation schemes in all sectors of the all the industries of China and come up with the viable policy action so that the desired sustainable development goals may achieve effectively. Hence, stakeholders need to consider recommendations of preceding research to enhance green economic recovery.

The impact of the digital economy development on haze pollution: evidence from the perspective of factor marketization

How to eliminate haze pollution is a major concern for all countries around the world. Based on panel data from 286 cities in China from 2011 to 2019, the article examines the impact of the digital economy development (DIGS) on haze pollution and the impact of transmission mechanisms in different dimensions using various methods such as the fixed effects model, mediated effects model, and threshold effects model. The study found that firstly, DIGS helps reduce pollution, and further research found that DIGS contributes to the reduction of haze pollution in the western region by improving the market allocation of factors. Secondly, the study concludes that the DIGS shows heterogeneity by dividing the full sample according to region, level of factor marketization, and city size. Finally, the threshold test model finds that the relationship between the DIGS and haze pollution is non-linear depending on the economic development level. The research in this paper provides new research literature on the development of the digital economy and the reduction of haze pollution, contributing to the development of a green economy in China.

Urban land expansion, fiscal decentralization and haze pollution: Evidence from 281 prefecture-level cities in China

Urban land expansion will influence aspects of economy and society, including the quality of the urban environment. This study aims to examine the impacts of urban land expansion in China on haze pollution under the fiscal decentralization system using the spatial Durbin model. Urban land expansion is measured using two dimensions of urban land expansion, namely, intensity and orderliness of the structure of urban land expansion. The results reveal that urban haze pollution in China exhibits significant positive spillover characteristics, which manifest as "high-high" and "low-low" characteristics of spatial agglomeration. In general, improving the expansion intensity of urban land and the orderly structure of urban land expansion can reduce haze pollution in local and surrounding areas. With the improvement of the degree of fiscal decentralization, the positive effect of an orderly urban land structure in reducing haze pollution will be weakened. The above-mentioned influences depict distinct heterogeneities at the levels of city size, type, and location.

The impact of fiscal decentralization on environmental pollution and the transmission mechanism based on promotion incentive perspective

At present, China's economy is transforming from rapid development to high-quality development, and environmental pollution stands out as an urgent need to be addressed. Fiscal decentralization is considered to confer economic incentives on local governments to obtain the right to gain and spend in economic growth. However, at the same time, political incentives are given to local officials under the promotion mechanism based on gross domestic product (GDP) assessment, and these two incentives become key to the environmental performance of the jurisdictions. Therefore, this paper incorporates fiscal decentralization, promotion incentives, and environmental pollution into a unified framework and theoretically analyzes the effects of fiscal decentralization, promotion incentives on environmental pollution, and the intrinsic mechanism of action. Using panel data of 30 Chinese provinces from 2002 to 2018, we examine that fiscal decentralization significantly promotes environmental pollution, and this performance is more obvious in economically underdeveloped regions. In terms of its mechanism of action, fiscal decentralization affects environmental pollution by increasing the demand for foreign direct investment, inhibiting technological progress, and enhancing environmental regulation, while foreign direct investment and technological progress significantly inhibit environmental pollution, but environmental regulation does not present a role of pollution control. Further study finds that under the consideration of "GDP-based promotion incentives," local officials will generate "competition for investment," relax environmental standards for FDI, and generate "competition for growth", which will inhibit technological progress and incomplete enforcement of environmental regulations, thus exacerbating local environmental pollution. On this basis, this paper proposes to further deepen the fiscal system reform, promote the optimization of local government competition system, and effectively restrain the vicious competition behavior of local officials under the fiscal decentralization system, so as to provide relevant insights for realizing China's economic transformation as well as high-quality economic development.

Fiscal decentralization, government innovation preference, and haze pollution

Local governments are the dominant players in haze pollution control; furthermore, financial power reconstruction affects the effectiveness of haze control. Government innovation preference achieves win-win results for environmental protection and economic development by increasing innovation support. Therefore, a moderating variable for government innovation preference was added to the fiscal decentralization effect on haze pollution, and their interactive effect on haze pollution was studied. This study was conducted in 30 provincial regions. Thus, the severity of regional haze pollution differs because of temporal heterogeneity and asynchronous development. Furthermore, we analyzed the impact on haze pollution from the perspectives of the temporal and spatial differences in different regions of China. The results indicate that (1) fiscal decentralization increases haze pollution, while government innovation preferences control it. (2) In a local evaluation model with a diversified background, fiscal decentralization restrains haze pollution, and pollution source complexity reduces government innovation preference's control pollution function. The interaction term revealed that government innovation preferences had a significant moderating effect. (3) Fiscal decentralization and government innovation preferences control the heterogeneity of haze pollution in different regions.

A Study on the Impact of Fiscal Decentralization on Green Development from the Perspective of Government Environmental Preferences

Green development is necessary for China to carry out high-quality economic development. As an important institutional arrangement in the vertical government structure, fiscal decentralization supports regional green development. Local government environmental preferences indicate local environmental protection awareness and affect the process of regional green development to a certain extent. Based on the review of relevant theories and literature, this study conducts an empirical analysis based on Chinese provincial panel data from 2007 to 2019 using a two-way fixed effects model and a panel threshold model. Both revenue decentralization and expenditure decentralization have a U-shaped nonlinear relationship with the green development efficiency calculated by the superefficiency SBM model, which includes undesirable output. Neither factor has a positive effect on green development efficiency at this stage, while local government environmental preferences are positively connected to green development efficiency. Furthermore, a moderating effect is observed in the relationship between fiscal decentralization and green development efficiency. Under the same level of revenue decentralization or expenditure decentralization, the stronger the environmental preferences of the local authority are, the higher the green development efficiency. This moderating effect is more significant in coastal areas than inland areas. Further research reveals a threshold for the moderating effect of local government environmental preferences on fiscal decentralization on green development. When the environmental preferences of local government are below the threshold, both revenue decentralization and expenditure decentralization significantly inhibit the improvement in green development efficiency. After the threshold is passed, the negative effects of both on green development efficiency are markedly curtailed. Then, the government performance appraisal system should be further optimized, fiscal decentralization reform should be strengthened, local financial investment in environmental protection should be expanded, and synergistic regional development should be promoted. China's green development should be promoted to an advanced stage.

Fiscal Decentralization, Green Technology Innovation, and Regional Air Pollution in China: An Investigation from the Perspective of Intergovernmental Competition

Fiscal decentralization (FD), as an institutional arrangement for the fiscal division between central and local governments, gives local governments the enthusiasm and autonomy to provide public products and services. With the dominance of environmental governance, how local governments can avoid intergovernmental “race to the bottom” issues through green technology innovation (GTI) is a matter of regional green development and continuous improvement of atmospheric environmental quality. Based on a sample of 30 provinces in China from 2003 to 2018, this paper uses the spatial Durbin model (SDM) to examine the relationship between FD, GTI, and regional air pollution and explores their spatial spillover effect and regional heterogeneity from the perspective of intergovernmental competition. The results indicate that the FD and GTI in various provinces had significant and regionally differentiated inhibitory effects on local air pollution. In Western China, due to the regional competition among local governments in terms of economic development, economic development-oriented fiscal expenditures crowd out environmental governance-oriented fiscal expenditures, which has led to the consequence that FD can intensify local air pollution and has a positive spillover effect, but the demonstration effect of green technological innovation can well moderate the effect of FD on air pollution. FD in the eastern region has played a positive role in promoting regional air quality improvement. However, its green technological innovation has not played a positive role in reducing emissions, and it plays a significant negative regulatory role in the emission reduction effect led by FD. Finally, the article puts forward policy recommendations in terms of a fiscal decentralization system, green technological innovation, and performance evaluation mechanism.

Does new-type urbanization help reduce haze pollution damage? Evidence from China's county-level panel data

Urban transformation is the key to sustainable urban development. China is currently undergoing massive urban transformation, that is, new-type urbanization. This study explored the relationship between new-type urbanization construction and haze pollution by constructing a time-varying DID model based on 2013-2018 district and county data. Our empirical results show that new-type urbanization can significantly improve haze pollution. We also examined the heterogeneous differences in new-type urbanization's effects on haze pollution. First, we find that new urbanization construction has no significant effect on haze pollution in cities rich in natural resources. Second, its effect on haze pollution was most pronounced in the eastern region, which had the highest urbanization rate. This study also explored the moderating effect of new urbanization and haze pollution from the urban governance perspective. The results show that the government's fiscal spending capacity is significant for new-type urbanization's ability to improve haze pollution. In addition, in the pilot year, the turnover of regional officials enhanced new-type urbanization construction to improve haze pollution. We also find that districts and counties implementing pilot new-type urbanization are conducive to reducing haze pollution in surrounding areas in the same city not implementing new-type urbanization; however, they exacerbate haze pollution in other provincial areas that have not implemented new-type urbanization. Finally, we propose relevant policy recommendations based on the empirical results.

Intergovernmental competition, industrial spatial distribution, and air quality in China

As clean air is a public good, local governments play an irreplaceable role in environmental protection. This study examines how intergovernmental competition affects air quality in China. The results reveal that intergovernmental tax competition increases regional sulfur dioxide and haze emissions and worsens regional air quality, while competition in infrastructure investment does not have such effects. Furthermore, tax competition will affect air quality through industrial spatial distribution. Intergovernmental competition attracts low-technical content capital flowing into where it is more aggressive, triggering a "race to the bottom" effect on industrial structure and attracting similar industries through an agglomeration economy. On this basis, this study uses the Spatial Durbin model to test the spatial impact of intergovernmental competition on air quality. The effects are manifested in two forms: pollution spillover and pollution transfer. Pollution spillover has a major effect on the air quality of neighboring regions at close geographical distances, while pollution transfer is mainly responsible for the air quality of regions with similar levels of economic development. The relocation of capital and industries between regions due to intergovernmental competition causes the spillover and transfer effects on air quality. In addition, this study analyzes the regulatory effect of fiscal decentralization and environmental regulation on the impact of intergovernmental competition on air quality.