Effect of Environmental Courts on Pollution Abatement: A Spatial Difference-in-Differences Analysis

Abstract

This paper investigates the impact of environmental courts on pollution abatement at the city level, utilizing the establishment of environmental courts in China as a quasi-experiment. A spatial difference-in-differences model is employed to control for the influence of environmental courts on neighbouring non-pilot cities. The results underscore the effectiveness of environmental courts in reducing industrial pollutant emissions, evident in both the pilot areas and adjacent non-pilot areas. The influence of environmental courts on pollution abatement is more pronounced in cities characterized by stronger environmental regulations, higher level of economic agglomeration, and higher level of openness. Mechanism analysis shows that environmental courts promote environmental supervision by governments, public participation in environmental protection, and expenditure on environmental governance by firms. In summary, this paper unveils the tangible effects of environmental courts on pollution abatement and elucidates the mechanisms underpinning this relationship. These findings provide timely implications for regulators concerned with environmental protection.