Natural Gas Transmission Project and AIr Pollution in China


ShanghaiTech SEM Working Paper No. 2021-002

 Kaiyin Hu

School of Economics, University of New South Wales

Wenhao Wu

School of Entrepreneurship and Management, ShanghaiTech University

In this paper, we examine the effect of China's Natural Gas Transmission Project (NGTP) on air pollution. The NGTP is the pipeline network that connects to almost all provinces in China, providing clean energy for industry and households. We use satellite data to measure the country's air quality from 1999 to 2015 at the city level and manually collected information about when each city connected to a natural gas pipeline. We exploit variation in connection time, and use the predicted connection time of pipelines in each city as the instrument to address potential endogeneity concerns. We find that connecting to natural gas pipeline signicantly reduces a city's air pollution by 8%.

Keywords: Natural Gas Transmission Project, Air pollution, China

Date Written: April 2, 2021

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