Has China’s Pilot Policy of Water Ecological Civilization City Construction Reduced Water Pollution Intensity?

Abstract

To address the deterioration of the water ecological environment, China’s Ministry of Water Resources launched 105 pilot projects for the construction of water ecological civilized cities in two batches in 2013 and 2014. Based on panel data of 283 cities in China from 2008 to 2020, in this study, we investigate the impact of the pilot policy of water ecological civilization city construction on water pollution intensity using the difference-in-differences method. We found that water pollution intensity in the sample period exhibited a downward trend, decreasing most rapidly during the pilot construction period. Controlling for urbanization level, technological innovation, import and export trade, and foreign investment, our study results show that the pilot policy significantly reduced water pollution intensity. Mechanism analysis shows that the reduction effect was achieved through the channels of optimizing industrial structure, increasing sewage treatment, promoting water recycling, promoting technological progress, and speeding up water price reform. The results of this study also show that the policy effect in terms of reducing water pollution intensity is heterogenous across time, in addition to exhibiting regional heterogeneity owing to differences in levels of economic development, water resource endowment, and environmental regulation intensity. The research results also provide a reference for other countries similar to China to reduce water pollution intensity, address the deterioration of the water ecological environment, and improve the water ecological environment in the process of economic development.