Introducing monitoring technologies in Chinese cities: Pollution reduction effects, enforcement strategies, and welfare consequences

Abstract

Abstract Monitoring technologies are widely used to enhance compliance for better environmental quality. While these technologies often bring pollution reduction, much is unknown about the enforcement strategy of local authorities and its welfare implications, given technologies’ spatially limited accessibility. Here we show the impact of nation-wide establishment of 1,436 air-quality monitoring stations in Chinese cities on pollution reduction, local enforcement strategy, as well as social welfare consequences. Leveraging high-resolution datasets and a quasi-experimental design, we find that newly introduced monitoring stations led to an 8.03% (9.6972 µg/m3) reduction in PM2.5 concentrations in urban areas. Within those areas, the stations resulted in 0.57% (0.3046 µg/m3) more reduction in PM2.5 concentrations in areas accessible by the stations compared to non-accessible areas. The air-pollution reduction was associated with decline in industrial activities and change in land use, and led to higher housing price in technically accessible areas within cities. The back-of-the-envelope calculation shows substantial urban spatial inequalities in welfare consequences, driven by health benefits, for urban residents close to monitoring stations. Our findings suggest that the application of monitoring technologies should take environmental justice into consideration for a more comprehensive idea of sustainable development.