Economic development and environmental conservation are two important challenges for China. A series of initiatives including Eco-province (EP) policies have been taken to achieve sustainable development by the Chinese government. Increasing concerns regarding policy implications on sustainable development have increased attention to the topic. However, the research on the relationship between economic development and pollutant (COD, SO2) emission intensities after the implementation of EP policy remains inadequate. We applied a Time-Varying Difference-in-Differences Model by employing Chinese provincial panel data to quantitatively study the policy effect, and further utilized the Mediating Effect Model to analyze the mechanism. The article generates several findings: (1) The EP policy had overall inhibitory effects on both COD and SO2 emission intensities, and it would reduce the emission intensity by 4.99% and 6.77% on average, respectively. However, there was a five year lag in the policy effect. (2) The policy effect was significant in the western and central provinces with high pollutant emission intensities, but not in the eastern provinces. (3) The primary inhibiting mediating effects of Eco-province policy to lower pollutant emission intensity were increased GDP per capita and inventions.
Keywords: China; Eco-province; mediating effect model; policy effect; pollutant emission intensity; time-varying difference-in-differences model.