Is Economic Transition Harmful to China’s Urban Environment? Evidence from Industrial Air Pollution in Chinese Cities

Abstract

Economic transition has posed a serious challenge to environmental protection efforts in China. This study explores the environmental effects of the triple transition process of marketisation, globalisation and decentralisation using data on industrial SO2 and soot emissions at the prefecture-city level. Panel data regression results find that marketisation and decentralisation have been harmful to the urban environment while economic globalisation has been beneficial to urban air quality. As is to be expected, state-owned enterprises have contributed to China’s environmental degradation. However, the environmental impacts of the triple processes of economic transition only occur in the coastal and central cities. The results imply that the institutional perspective provides an important angle to understand the issue of environmental deterioration in China.