Analysis on the Impact of River Basin Ecological Compensation Policy on Water Environment Pollution

Sihan Liu, Ying Li (), Yanxiang Ge () and Xiangyan Geng
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Sihan Liu: School of Economics and Management, Shandong Agricultural University, Tai’an 271018, China
Ying Li: School of Economics and Management, Shandong Agricultural University, Tai’an 271018, China
Yanxiang Ge: School of Economics and Management, Shandong Agricultural University, Tai’an 271018, China
Xiangyan Geng: School of Economics, Shandong University of Finance and Economics, Jinan 250014, China

Sustainability, 2022, vol. 14, issue 21, 1-14

Abstract: The implementation of the river basin ecological compensation policy (ECP) is an important way to improve the ecological environment and achieve the goal of “beautiful China” (“Beautiful China” is a concept put forward by the 18th National Congress of the Communist Party of China.). The impact analysis of the watershed ecological compensation policy provides an important basis for improving the mechanism. The research regards the Dawen River Basin ecological compensation policy in Shandong Province as a natural experiment and uses the 2005–2017 prefecture-level city panel data. Based on the two-way panel fixed effect model, Propensity Score Matching and Differences-in-Differences (PSM-DID) are applied to analyze the mechanism of the Dawen River Basin ECP pilot project and its impact on the intensity of water pollution, in order to provide experience for the development of ecological compensation work in the Yellow River Basin in the future. The empirical results show that the implementation of the river basin ECP has significantly reduced the intensity of water pollution by 22.47% with a short time lag, and the pollution reduction effect of the policy is increasing year by year. The river basin ECP has an obvious optimizing effect on industrial structure, with an inconspicuous effect on economic growth and technological progress. Finally, relevant policy recommendations are put forward from the aspects of the promotion, implementation and effect of the river basin ECP.

Keywords: basin ecological compensation; PSM-DID method; two-way panel fixed effects model; water pollution (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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