From fabrication to consolidation of China's political blue‐sky: How can environmental regulations shape sustainable air pollution governance?

Abstract

AbstractPolitical blue sky is unsustainable because conflicting interests in China's fragmented authoritarianism (FA) lead to the failure of air pollution regulations. This study explores how to transform China's political blue sky from short‐term fabrication to long‐term consolidation by effective environmental regulations. A two‐pronged mechanism design in the non‐cooperative tripartite evolutionary game is employed to model the dynamic cost–benefit strategy interactions among the central government, local governments, and polluting enterprises for sustainable air pollution control. Policy simulations are conducted to examine the effectiveness of several environmental regulation instruments for leading to the ideal outcome. In baseline scenarios, proper coordination of environmental inspection, vertical and horizontal transfers, and environmental taxation can impel the game to converge to the desired evolutionary equilibrium. In extended scenarios, three long‐term oriented inspirations—double‐dividend effect of environmental tax revenues, public monitoring, and the Porter hypothesis effect of environmental regulations—can improve the efficiency of environmental regulations compared to baseline scenarios. From a methodology perspective, policy simulation in an evolutionary game framework provides a novel addition to the research toolkit for addressing FA.