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Environmental Economics

My second research interest is to explore the consequences of environmental pollution and policies related to environmental pollution mitigation.

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While it is well-established that air pollution damages health and inhibits productivity, the political cost of air pollution remains poorly understood. We estimate the causal effect of air pollution on political trust in local government in China, which underpins the stability of the authoritarian state. We find that a one μg/m³ exogenous increase in PM2.5 concentrations, due to atmospheric thermal inversion, reduces trust in local government by 4.1 per cent of one standard deviation. 

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We study theoretically and numerically the effects of an environmental tax reform using endogenous growth theory. We then apply the core theoretical model to a real growing economy and find that a boost in long-run economic growth following such a carbon policy is a possible outcome.

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This study provides a political economy explanation for the recently increased stringency of China's environmental policy. Specifically, we argue that prior to 2009, bribery from polluting firms was relatively successful in persuading local regulators to implement weak environmental policies. Since that time, pollution has reached a threshold that significantly changed regulators' objectives, leading them to refuse bribes, hence strengthening environmental policy. 

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This paper studies how citizens' self-reported environmental knowledge affects their trust in public service providers and subsequently their decisions about accepting the provision of a pollution management facility in their neighborhood. We find that the public's perceived environmental knowledge damages their trust in the operator, which lowers their acceptance of the facility siting, while damage to their trust in the government is negligible. In addition, we find that citizens' preferences for the type of information disclosed and the channels used for disclosure can affect public trust and thus acceptance of the facility siting. 

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This paper studies the effectiveness of pollution control in urban China by constructing a two sub-system analysis: household pollution control subsystem and industrial pollution control subsystem. We integrate slack-based model with undesirable outputs to estimate the pollution control efficiency in two subsystems for Chinese provinces from 2011 to 2015. The results show strong evidence on provincial and regional heterogeneity in pollution control efficiency for both systems. We then measure the economic importance of controlling various pollutants by dual price approach. 

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This paper examines the environmental effect of political connections at the individual and organizational levels. We integrate political connections at both levels in a four-stage game-theoretic framework to study the political interplay between an entrepreneur, a bureaucrat and a government. We distinguish individual-level political connections from bribery and argue that while the latter is generally more efficient for the firm aiming to reduce environmental tax payments, political connections become more appealing when the bureaucrat places a higher value on indirect non-monetary benefits. 

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