Abstract
The implementation of the Ecological Red Lines (ERL) policy in China is under the background that natural resources have been immoderately exploited for serving rapid economic growth in the last 40 years, where the ecosystem's degradation happened and people's health could be affected. As the secondary industry is the contribution source of rapid growth as well as the threat source that threatens the natural environment and public health, the delimitation of ERL can act as a legal restriction that forces the industries to control the emissions and to upgrade the industrial composition. This paper conducts an ex-post policy evaluation on the improvement effects of industrial structure and residents' health and through ERL's pilot scheme in four provinces of China. By using the difference-in-differences (DID) method, the estimation results show that: (1) The industrial upgrading effect exists but to a small extent, as the ERL policy has generally elevated the tertiary industry's output by only 0.033% and hardly shown any promotion effects on the ratio of the tertiary industry to secondary industry; (2) The residents' health has been significantly improved by 1.029% after ERL policy on the whole, and enhanced over time mostly; (3) The health promotion effects are similar among three out of the four pilot provinces, whereas the industrial upgrading effects performed large heterogeneities among the four. These empirical results may provide references for the wider extension of ERL policy with more practical execution solutions in developing economies.
Highlights
The Ecological Red Lines (ERL) policy has no significant effect in Jiangsu Province completely [see the βin column (2-a) and (2b)], has a positive effect on Tertiary but negative on Update in Hubei [in (3-a), (3-b)]; for Hainan and Chongqing, both their Update terms are significantly related to the ERL but in the opposite direction [see (4-b) and (5-b)] and other indicators are insignificant [(4-a) and (5-a)], where Hainan’s industrial upgrading ratio Update is positive and that of Chongqing is negative [(4-b) and (5-b)]
The results show that the ERL policy is thoroughly effective in Jiangsu Province and Hainan Province, and is even larger in degree for them
The industrial structure could be upgraded by the innovation of green technologies or reasonable industrial policies, such as reinforcing the market negative list approach or setting the market-entry lists
Summary
A typical developing region is composed of cities, villages and towns normally distributed with secondary industries. The secondary industries normally produce the manufactured or intermediate goods for domestic and global supply chains. By transaction and usage of the goods, the residents’ welfare and economic growth can be promoted. While commercial manufacturing can provide intuitive sizable economic statistics, the consumed natural resources, including land, clean water, forest, mines, non-renewable energy sources, and biodiversity, have been neglected or regarded as slight “negative externality” for a long period [1, 2], even though they served as indispensable elements for secondary industry [3]. The residents’ health degree could come down and the industrial structure remains pollution-intensive and energy-intensive, causing a greater loss for both the individuals and the whole society. According to the Food and Agriculture Organization of the United Nations (FAO), the global resources of soil, land and water is “reaching the limit,” as the land area per capita declined by 20% from 2000 to 2017, the groundwater consumption rose from 688 km3/year in 2010 to 820 km3/year in 2018 and let to a 250 km3/year of water loss for the soil aquifer, the globe will suffer from a higher risk of environmental disasters and prevalence of disease if the current consumption trends have not ceased [7]
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