Rectifying local governments’ strategic environmental enforcement: Can refined air pollution monitoring enhance local air quality in China?

Insufficient local environmental enforcement has become a pivotal economic and political concern in China. In 2017, the Chinese central government introduced the Air Pollution Hot-Spot Grid (APHG) monitoring program. However, little is known about the consequences. This study investigates in detail how this monitoring program affects city-level air pollution by applying the difference-in-differences method. This program was responsible for a notable decrease in air pollution at the city level. This decrease was mostly the result of stronger local environmental governance, advances in green innovation, and an upgraded industrial structure. Additionally, an examination of heterogeneous treatment effects across different cities revealed that the most substantial effects were observed in large, non-resource-based, and eastern cities. Additional analysis reveals the presence of a spillover effect, whereby the adoption of this program in one city helps reduce air pollution in nearby cities. These results highlight the significance of refined air pollution monitoring for addressing imperfect local environmental enforcement.