 Internalizing externalities through ecological compensation: Evidence from trans-boundary water pollution in ChinaXiaoxi Wang, Meng Xu and Kevin Chen Journal of Environmental Economics and Management, 2025, vol. 133, issue C Abstract: This study examines the effects of China's cross-provincial ecological compensation scheme (CpECS) on trans-boundary water pollution. Using a staggered difference-in-differences method, we find that the CpECS significantly reduces water pollution in terms of ammonia nitrogen (NH3-N) concentrations by 33.4 %. By linking water quality with point-source and nonpoint-source pollution control practices, we find that these improvements result from reductions in industrial wastewater discharge and pig production, and improvement in municipal sewage treatment capacity. However, the scheme does not yield a significant reduction in chemical oxygen demand (COD) concentrations, likely due to a lack of incentives to exceed contractual targets in policy areas once those targets are met. Keywords: Trans-boundary pollution; Water quality; Ecological compensation; Nonpoint-source pollution; Point-source pollution (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:133:y:2025:i:c:s0095069625000841 DOI: 10.1016/j.jeem.2025.103200 Access Statistics for this article Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates More articles in Journal of Environmental Economics and Management from Elsevier |
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