Spatial spillover effects of environmental regulations on air pollution: Evidence from urban agglomerations in China

Environmental regulations affects the environmental quality of not only local areas but also surrounding regions. It remains unknown whether the effect of environmental regulations on the surrounding regions is free riding or pollution shelter. Based on the data from 2006 to 2018, the spatial correlation of PM_2.5 in Beijing-Tianjin-Hebei (BTH), Yangtze River Delta (YRD) and Pearl River Delta (PRD) urban agglomerations in China was examined in this study. In addition, the spatial spillover effects of environmental regulation on PM_2.5 concentrations were explored while the socio-economic driving factors of the heterogeneity of pollution spillover were identified via SDM based STIRPAT framework. Results showed that the characteristics of PM_2.5 concentrations spatial correlations varies from one urban agglomeration to another. This study revealed that the air pollution is affected by not only local environmental regulations, but also regulations implemented in surrounding cities. The PM_2.5 concentration of BTH, YRD and PRD increased by 0.76, 0.147 and 0.109 for each unit increase in environmental regulation of surrounding cities, respectively. In fact, cities with loose regulation become the pollution shelters. The spatial spillover effects offset the improvement effects of local environmental regulations on the air quality. Furthermore, the comparison amongst three urban agglomerations showed that the spatial spillover effects of PM_2.5 concentration in BTH and YRD are higher than that of PRD. This is attributed to differences in industrial structure, population density, economic development, FDI and geographical location. Therefore, the spatial spillover effects should be taken into consideration and joint regulation should be strengthened to address air pollution issues in urban aggregations.