Conference Agenda

Both environmental challenges and achievements in China are well known. In this study, we use monthly PM2.5 and nighttime light data for prefectural-level cities in China to empirically illustrate that Central Environmental Inspection, a national campaign-style enforcement which was institutionalized with cadre evaluation system and informal political networks, was effective to deliver quick but short-lived pollution reduction at significant economic cost. Our estimates show that the economic sacrifice was outweighed the benefits of cleaner environment through CEIs. City political leaders bearing network ties with the incumbent provincial leaders tend to respond with different degree of vigor to fulfill administrative tasks for environmental protection. The study adds to a growing body of literature to bring formal and informal institutional factors under an analytical lens to empirically investigate the proactive role of these factors in shaping trajectory of environmental and economic change in China.

This study estimates the causal impact of the recent years' high electricity prices on electric vehicle (EV) adoption. Utilizing Swedish registry data and leveraging regional discontinuities in electricity prices, I demonstrate that higher electricity prices reduce EV demand, but also the demand for combustion-engine vehicles through the income effect. Additionally, I explore heterogeneity in price responsiveness, and show that the sensitivity to prices is surprisingly similar across consumer types. Based on these findings, I explore a counterfactual policy that reduces electricity prices for EV buyers, and show that under plausible assumptions, this policy is less cost-effective in boosting EV demand compared to subsidies for EV purchases or charging infrastructure.

Crop residue burning significantly contributes to air pollution in low- and middle-income countries (LMICs). This paper presents a causal estimate of the capital rental subsidy on crop residue burning. I involve 1,024 farmers in a field experiment with two arms: a control arm and a capital rental subsidy arm. Using high-resolution satellite imagery, I find that the capital rental subsidy reduces crop residue burning. The finding suggests that financial constraints rather than information constraints drive crop residue burning. The effects are concentrated among farmers who faced high financial constraints, but not among those who faced information constraints at baseline. Crop residue burning also decreases among neighbors, indicating that green technology generates significant spillover effects within the village. The results suggest that the capital rental subsidy can be a cost-effective measure to address negative externalities, i.e., air pollution, in the agricultural sector.

Although the environmental impact of trade has been a long-standing concern, there is still only scant evidence on the channels through which international market access affects pollution. In this paper, we exploit the unique episode of China’s world market integration in the early 2000s to provide direct empirical evidence on three such mechanisms. We combine granular satellite data on air pollution with detailed information on manufacturing firms and coal power plants and leverage exogenous foreign demand shocks for identification. Three main findings emerge: exporting firms reduce local pollution (scope-1); pollution levels around coal power plants rise due to regional export shocks (scope-2); upstream suppliers reduce pollution in the face of export demand shocks to downstream firms (scope-3). Our findings point to China’s almost complete reliance on coal power plants to fuel its export-driven growth as the main driver of pollution increases.