The Impact of Pollution Fee Reform on the Emission of Water Pollutants: Evidence from Manufacturing Enterprises in China.

Abstract

With the development of China’s industrial economy and urbanization, water pollution has become serious and gradually exposed to the public. The pollution fee policy is an important tool to force enterprises to reduce pollution. This study used the panel data of manufacturing enterprises during 2006–2013 and the multiperiod difference in differences (DID) method to systematically analyze the impact of water pollution fee reform on emissions of manufacturing enterprises in China. In general, enterprises facing improved pollution fee collection standards reduce COD emissions by approximately 4.1%. However, significant location heterogeneities are captured in China. The rising water pollution fees have promoted the emission reduction of enterprises in northern China and resource-based cities, but the effect is not significant in southern China and nonresource-based cities. Furthermore, the mechanism analysis shows that enterprises mainly reduced emissions through terminal treatment and reducing production. This study provided micro evidence for research on the effect of pollution fee reform and supplied a reference for the improvement of the environmental protection tax system in China.