Does limited decentralization of environmental enforcement power improve air quality? Quasi-experimental evidence from China

Abstract

Utilizing the Comprehensive Environmental Administrative Enforcement Reform (CEAER) in China as a quasi-natural experiment, this paper has adopted 179 prefecture-level cities from July 2018 to December 2020 as research sample to assess whether the limited decentralization of environmental enforcement power can improve air quality through a time-varying difference-in-difference (DID) approach. Results show that CEAER can achieve better air quality improving effects, which can not only contribute to the decrease of daily mean values of Air Quality Index (AQI), but also contribute to the decrease of daily mean values of PM2.5, PM10, SO2, and CO. And this promotion is mainly achieved through the micro mechanism of raising environmental penalties strength. Further examination of the heterogeneity in terms of economic factors, city rank, pollution abatement pressure, and political constraints reveals that CEAER's policy effects are mostly insignificant in cities with higher levels of economic development and administrative rank, and positively significant in poor historical air quality cities and key environmental protection cities. These results underscore the positive effects of the limited decentralization of environmental enforcement power and provide ideas for other regions to draw on for environmental management system reform.