Author ORCID Identifier

https://orcid.org/0000-0001-5925-2198

Date of Award

8-9-2022

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Andrew Feltenstein

Second Advisor

H. Spencer Banzhaf

Third Advisor

Charles Hankla

Fourth Advisor

Stefano Carattini

Abstract

This dissertation has two chapters on environmental economics. Chapter one eval- uates an energy conservation program in China, the Top-1,000 Energy-Consuming Enter- prises Program. The second chapter, co-authored with my colleague Sharad KC, investigates China’s location choice of air quality monitors. Both chapters address the principal-agent issue between the central and local governments.

Chapter one empirically evaluates the environmental impact of China’s energy con- servation program, the Top Thousand Energy-Consuming Enterprises Program. Launched at the beginning of the 11th five-year plan (2006), the program aims at reducing the energy intensity of economic growth by setting annual energy-saving targets on one thousand most energy-intensive companies in nine industries from 2006 to 2010. These companies account for about one-third of China’s total energy consumption. In 2011, the government reported an over 95% compliance rate of the energy-saving targets and about 50% overachievement of the national target. However, the environmental impacts of the program are ambiguous. This paper provides a thorough discussion and empirical evidence on whether the firms in- volved have affected the surrounding surface concentration of air pollutant sulfur dioxide.

Since the program aims at energy savings instead of air quality improvement, the location choice of these companies serves as a random allocation of air quality. I was able to exploit this random aspect of the program by using a quasi-experimental (Difference-in-difference) approach to evaluate the air quality effect of this program. I find this program does not re- duce sulfur dioxide emissions in treated establishments, which is consistent with the spatial results. Older governors comply more with energy-saving programs due to concern about political reputation before retirement.

Since 2013, China has added more than four thousand air quality monitoring stations that provide the public with real-time information on six airborne pollutants, i.e., particular matter (P.M.) 2.5, P.M.10, sulfur dioxide (SO2), nitrogen dioxide (NO2), ozone (O3), and carbon monoxide (CO). Authorities manage these monitors at four levels of the government: state, provincial, municipal, and county. Typically, pollution monitors are located where they could be deemed useful, for example, within air polluted areas or near schools, hospitals, road traffic, and industries. While the real-time information has helped individuals, firms and governments make decisions; it is unclear how a government body makes siting decisions. Chapter two aims to answer three questions: Where are the pollution monitors located? What drives the decision to add a new monitor in a particular location? Is there a difference in location choice behavior between central and local governments in China? We find that though central monitors currently locate in cleaner areas than local monitors, the correlation between P.M. 2.5 and monitor location is insignificant. We also find that local governments tend to choose cleaner areas to place monitors, while the effect of air pollution on adding new central monitors is ambiguous.

DOI

https://doi.org/10.57709/30587014

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