China's Coal Ban policy is one of the world's most extensive and ambitious programs designed to mitigate air pollution. However, the effects of this policy on the environment and the economy remain unknown. This study examines the impacts of the Coal Ban policy, which has been implemented in 28 cities in Beijing and its adjacent provinces, on air quality and economic growth. Based on a panel dataset spanning 138 cities between 2010 and 2019, the policy was found to have reduced atmospheric particulate matter with a diameter less than or equal to 2.5 μm (PM2.5) by 4.74 μg/m3 in the 28 cities, but have also reduced per capita gross domestic product (GDP) by 5.8%. Further, the policy has also produced spatial spillover effects. In cities near the 28 cities, the policy has reduced PM2.5 by 4.40 μg/m3 and per capita GDP by 0.9%. Robustness tests corroborated the reliability of the conclusions. These findings underscore the importance of fostering a harmonious relationship between efforts to mitigate air pollution and the pursuit of economic growth objectives.
Keywords: Air pollution; Difference-in-Differences model; Economic growth; Policy evaluation; Spillover effect.
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