A Spatial Equilibrium Analysis of Air Pollution in China

Eiji Yamada

No 211, Working Papers from JICA Research Institute

Abstract: Abstract Weconstructaspatialequilibriummodelwithendogenousairpollutionasaby-productof production andconsumption,wherespatiallymobileskilledandunskilledworkersareaffected negativelybutheterogeneouslybyairpollution.Usingacalibratedversionofthemodelbased on dataforChinain2010,weshowthatstrictregulationcanbea centripetal forcethatattracts workersandproductiontowardtheregulatedplace,whilereducingthelocalandoverallemission of pollutants.Thisresultisincontrasttotheinsightsoftraditionaltheoriesthatseeenviron- mental regulationasa centrifugal forceforthelocaleconomy.Themigrationofworkerswho care environmentalquality,input-outputlinkagesindomestictradenetworks,andopennessto internationaltrade,workinthemechanismdeliveringthisresult.Wethenconsiderahypothetical policy toreducenationalindustrialemissionby10percentandcomparestrategiesonhowto allocate reductionresponsibilitiesacrosscities.Wefindthatconcentratingresponsibilityina limited numberofrichcitiesmayoutperformamoreequalallocationintermsofwelfareand economic output.

Keywords: China; AirPollution; Domesticmigration; Spatialequilibriummodel; Environmental (search for similar items in EconPapers)
Date: 2020-04
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Persistent link: https://EconPapers.repec.org/RePEc:jic:wpaper:211

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