How does manufacturing haze pollution decrease in China: a decomposition study of structural model based on general equilibrium framework.

Abstract

Based on the annual mean PM2.5 concentration data of 30 provinces and cities in China from 2006 to 2020, this paper constructs a structural model of manufacturing haze pollution, expounds the main mechanisms affecting haze pollution, then statistically decomposes the main factors affecting the change of pollution emissions, and examines the direct and indirect impact paths of the change of haze pollution emissions in China. The study found that (1) the inhibitory effects of latent variables on manufacturing haze pollution is from strong to weak in order: industrial structure upgrading, environmental regulation, trade opening, productivity improvement, and economic scale expansion, while the optimal path for the indirect effect of exogenous latent variables on haze pollution is to rely on environmental regulation and opening up to achieve the improvement of productivity, so as to achieve the purpose of reducing haze pollution. (2) The analysis based on the PVAR model found that industrial structure adjustment is the key factor of haze decline in both the short and long term. Environmental regulation has an obvious effect on haze control in the short term, but in the long run, it still needs to rely on industrial structure adjustment, production efficiency improvement, and trade opening to achieve the goal of reducing haze. (3) There is an inverted U-shaped nonlinear relationship between output scale and environmental regulation. In addition, trade openness has a long-term effect on productivity. Technology spillovers from opening up can reduce haze pollution in the long run by improving productivity. (4) The environmental regulation policy in the central region is characterized by "race to the bottom," while the eastern region shows the characteristic of "race to the top" in the policy game of improving productivity and optimizing the industrial structure. Therefore, haze control requires an appropriate intensity of environmental regulation to reduce the proportion of high pollution and high energy consumption industries. Make full use of the international cooperation platform of the "the Belt and Road Initiative" and the pilot free trade zone to promote substantive cooperation between Chinese enterprises and developed countries in the field of environmental protection technology, increase investment in research and development of clean equipment and cleaner production technology, improve productivity, help China's green manufacturing, and contribute Chinese wisdom and Chinese solutions to global environmental governance and climate change.