Does the Environmental Supervision System Improve Air Quality in China? An Empirical Study Using the Difference-in-Differences Model

To effectively solve the problem of environmental pollution, the Chinese government has implemented an environmental supervision system since 2002. The environmental supervision system mainly uses the four functions of supervision, investigation, coordination, and emergency response to strengthen environmental protection supervision and law enforcement, respond to environmental emergencies, and coordinate cross-regional pollution disputes. As an important system design for China to control environmental pollution and promote the ecological transformation of economic development, the policy effect of the environmental supervision system deserves attention. This paper uses the difference-in-differences method to investigate the impact of the top-down environmental supervision system on air quality based on the 2000–2016 data for 285 prefecture-level cities in China. The results indicate that the annual average concentration of PM₂.₅ decreased significantly after the implementation of the environmental supervision system. The dynamic analysis shows that PM₂.₅ decreased most markedly in the first year after the implementation of the policy, and then the effect gradually weakened. Mechanism analysis suggests that the environmental supervision system can break the collusion between government and enterprise, encourage enterprises to carry out technological innovation, change pollutant discharge behavior and push local governments to adjust the industrial structure, enhance environmental protection awareness to reduce the PM₂.₅ concentration, and improve air quality. Comparing different regions, the PM₂.₅ in East China, North China and Northeast China are relatively high, and the pressure for air pollution control is great. Meanwhile, we find that the environmental supervision system has a significant station effect. Compared with other cities, the cities where the environmental supervision centers are located are more deterred by the environmental supervision, and their air quality has improved to a significantly greater degree. In the future, we should further strengthen the environmental supervision of high-pollution areas and non-station cities, and pay more attention to improving the long-term effect of the environmental supervision system.