Economic Policy Uncertainty and Co-Control of Air Pollutants and CO 2: Evidence from 282 Cities in China

Xuan Yang, Geng Chen, Chunzi Qu, Zhixuan Chen, Yang Wen, Lei Shi () and Feng Long ()
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Xuan Yang: School of Environment and Natural Resources, Renmin University of China, Beijing 100872, China
Geng Chen: School of Business, Hong Kong Baptist University, Hong Kong, China
Chunzi Qu: Department of Business and Management Science, Norwegian School of Economics, 5045 Bergen, Norway
Zhixuan Chen: School of Environment and Natural Resources, Renmin University of China, Beijing 100872, China
Yang Wen: Chinese Academy of Macroeconomic Research, Beijing 100038, China
Lei Shi: School of Environment and Natural Resources, Renmin University of China, Beijing 100872, China
Feng Long: Chinese Academy of Environmental Planning, Beijing 100041, China

Energies, 2024, vol. 17, issue 11, 1-23

Abstract: China is currently focusing on the cooperative control of air pollution and CO 2 emissions, as well as the mitigation of economic policy uncertainty (EPU). By using panel data from 282 cities spanning from 2003 to 2017 and a newly constructed city-level EPU index, a spatial Durbin, two-way fixed-effects model is employed, with the aim of estimating the impact of EPU on the synergistic emissions intensity (SEI) of air pollutants and CO 2 . Additionally, this paper investigates the potential channels through which EPU influences SEI. It also explores how pressures related to environmental protection and economic development affect the impact of EPU on SEI. The results indicate that a unit increase in EPU will result in a rise in the SEI of local cities, adjacent cities, and total cities by 930.9%, 69,162.7%, and 70,093.6%, respectively. Moreover, the channel analysis suggests that EPU exacerbates SEI by undermining the upgrading of the industrial structure, augmenting industrial structure distortion, and escalating labor market distortion. Furthermore, the effect of EPU on SEI may be lessened by an increase in environmental protection pressure, while an increase in economic development pressure may exert a positive influence. Finally, this paper concludes by recommending that policymakers should prioritize the maintenance and stability of economic policies, facilitate the advancement of the industrial structure, enhance the efficiency of labor resource allocation, and underscore the significance of managing urban air pollution and CO 2 emissions.

Keywords: economic policy uncertainty; air pollution and carbon emissions; synergistic emission intensity; spatial spillover effect (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
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