Policy impact of new energy vehicles promotion on air quality in Chinese cities

Abstract

We conduct a rigorous and systematic empirical study on the effect of “Ten Cities, Ten Thousand New Energy Vehicles (NEVs) project” on urban air quality. After examining the applicable conditions of the "difference-in-differences" method, we demonstrate that this project meets the parallel trend assumptions, randomness assumptions and homogeneity hypothesis in terms of the impact on air quality, represented by urban air nitrogen dioxide concentration. Thus, during the whole promotion period, the promotion of new energy vehicles can reduce the concentration of nitrogen dioxide in urban air, but the effect is not significant every year of the promotion. The effect of the project evolves over time. The fact that the effect of reducing the concentration of urban air nitrogen dioxide is small is relevant to the small number of new energy vehicles, because the entire project did not attain the expected target. As a result, the promotion of new energy vehicles has become an option to improve urban air quality, especially by reducing air nitrogen dioxide concentration.