Heterogeneous Impact of Economic Policy Uncertainty on Provincial Environmental Pollution Emissions in China

Abstract

With China’s proposal of carbon peak and carbon neutral goals, its trend of economic development has shifted from pursuing high-speed economic development to high-quality development. However, for the past few years, with the increasing global economic policy uncertainty, fluctuations in the world economy, especially emergent through public events such as COVID-19, affect investment and consumption, and thus indirectly affect the realization of the dual carbon target. Economic policy uncertainty plays an increasingly important role in many factors affecting environmental pollution. We conducted an empirical test on sample data, which are from 30 provinces and autonomous regions in China from 2008 to 2020, to further study the impact of economic policy uncertainty on environmental pollution emissions. We found that: (1) Economic policy uncertainty is inversely related to the emission of environmental pollution, and the consumption effect brought by economic policy uncertainty is more than the investment effect. This means that, with the economic policy uncertainty index increasing, the comprehensive index of environmental pollution emissions is lower, and the environmental pollution emissions are lower; (2) Compared with provinces with an average level of economic development, the impact of economic policy uncertainty on environmental emissions is deeper in developed provinces.