Agglomeration, Environmental Policies and Surface Water Quality in China: A Study Based on a Quasi-Natural Experiment

Abstract

This paper investigates the relationship between agglomeration and water pollution, and the effect of environment policies on water pollution reduction. The study employs a quasi-natural experimental method by coupling river water monitoring sites and development zones (DZs). We found that DZs were associated with water quality deterioration in their surrounding areas. However, the “Water Ten Plan”, which was released in 2015 and requires DZs to install water treatment facilities, effectively reduced water pollution, especially for those DZs with more polluting industries. Our findings provide evidence that agglomeration can facilitate efficient processing of wastewater by enabling its centralized treatment. The paper provides quantitative evidence for the effect of agglomeration and environmental policies from a micro point of view.