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American Economic Review Vol. 99 No. 2 2009

Winter Heating or Clean Air? Unintended Impacts of China's Huai River Policy

Douglas Almond1; Yuyu Chen2; Michael Greenstone3; Hongbin Li4

1 Department of Economics and SIPA, Columbia University, International Affairs Building, MC 3308, 420 West 118th Street, New York, NY 10027, and NBER. · 2 Applied Economics Department, Guanghua School of Management and IPER, Peking University, Beijing 100871, China. · 3 Department of Economics, MIT, 50 Memorial Drive, E52–359, Cambridge, MA 02142, Brookings Institution, and NBER. · 4 Department of Economics, School of Economics and Management, Tsinghua University, Beijing 10084, China.

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Abstract

This paper assesses the role of heating entitlements in generating stark air quality differences across China. During the 1950-1980 central planning period, the Chinese government established free winter heating of homes and offices as a basic right via the provision of free coal fuel for boilers. The combustion of coal in boilers is associated with the release of air pollutants, especially total suspended particulates (TSP). Due to budgetary limitations, however, this heating entitlement was only extended to areas to the north of the line formed by the Huai River and Qinling Mountains in central China. We find this procrustean policy led to dramatically higher TSP levels in the north; the difference is roughly 5-8 times current TSP concentrations in the US. This result holds both in a cross-sectional regression discontinuity-style estimation approach and in a panel data setting that compares the marginal effect of winter temperature on TSP in northern and southern China. In contrast, we fail to find evidence that the heating policy has a meaningful impact on sulfur dioxide (SO2) and nitrogen oxide (NOx) concentrations.

DOI
10.1257/aer.99.2.184
Volume
99
Issue
2
Pages
184-190
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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