Has environmental information disclosure eased the economic inhibition of air pollution?

Abstract

To improve environmental quality, the Chinese government implemented a series of environmental policies, including the environmental information disclosure system, which is critical to promoting China’s ecological development, and PM2.5 monitoring data, which constitute the most important and valued index. Using data from 120 cities in which the environmental information disclosure policy was implemented in China from 2008 to 2016, this research empirically tested the impact of air pollution on economic development and the transmission mechanism of this effect using a two-stage least squares regression model (2SLS). Additionally, this study innovatively tested the impact of environmental information disclosure on air pollution and economic development. Our results indicate that air pollution can hinder economic development and that spending on scientific research and financing polluters are two crucial transmission mechanisms. Disclosure of environmental information effectively reduces concealment of and failure to report pollution, enabling the environmental reports published by the government to more accurately reflect the air quality. By increasing the government’s environmental protection expenditure, this disclosure system expands environmental protection employment and infrastructure construction. In this way, the negative externality of air pollution has been alleviated by the government’s enhanced environmental governance.