Fiscal Expenditures on Science and Technology and Environmental Pollution: Evidence from China.

Area of Science:

• Environmental Science
• Economics
• Public Policy

Background:

• Environmental pollution is a critical issue in China.
• Existing research primarily examines national aggregate emission changes.
• The impact of fiscal expenditures on science and technology (FESTs) on urban environmental pollution remains understudied.

Purpose of the Study:

• To investigate the effect of FESTs on environmental pollution across Chinese cities.
• To analyze the mechanisms through which FESTs influence pollution levels.
• To examine regional and temporal variations in the FESTs-pollution relationship.

Main Methods:

• Analysis of data from 260 Chinese prefecture-level cities over ten years.
• Focus on three key pollutants: sulfur dioxide (SO2), wastewater emissions, and PM2.5.
• Econometric analysis, including GMM and instrumental variable approaches to address endogeneity.

Main Results:

• FESTs significantly reduce SO2 emissions by 5.317% and PM2.5 concentrations by 5.329% per 1% FEST increase.
• FESTs do not significantly alleviate wastewater emissions.
• Mechanisms include impeding fixed asset investment and promoting R&D activities.

Conclusions:

• Government investment in science and technology is an effective tool for controlling SO2 and PM2.5 pollution in China.
• Policy implications suggest increased attention to FESTs for sustainable development and environmental quality.
• Differentiated impacts across regions and time highlight the need for tailored strategies.