Assessing the effect of the coal-to-gas program on air pollution: evidence from China.

Abstract

This paper studies the relationship between the coal-to-gas program and air pollution in China and provides micro-evidence of the mechanism from the perspective of households. Using daily air pollution and meteorological data between January 1, 2016, and January 1, 2020, we assessed the effect of the coal-to-gas program on air pollution by introducing the regression discontinuity designs in time (RDiT). We found that the coal-to-gas program significantly improved air quality and brought significant economic benefits. In the short term, the coal-to-gas program can lead to more than 10 units of reduction in SO2, PM2.5, and AQI in the treatment group, while it can lead to more than 50 units in the long term. Using the difference-in-differences approach, we found that the coal-to-gas program has significantly reduced air pollution. Combined with the micro-panel data of the China Health and Retirement Longitudinal Study from 2011 to 2018, we found that the coal-to-gas program changes the household heating energy choices and that the probability of coal-fired heating of households in pilot areas is decreasing. The study suggests that non-clean energy in households should be further replaced to continue improving air quality.