Is the implementation of energy saving and emission reduction policy really effective in Chinese cities? A policy evaluation perspective

Reducing pollutant emissions while ensuring a stable economic growth is an important embodiment of sustainable development. Based on the "National Comprehensive demonstration of Energy Saving and Emission Reduction Fiscal Policy" ("ESER" policy) proposed by the Chinese government in 2011, this paper analyzes the impact of such policy on emissions reduction and economic growth. Under the framework of Differences-in-differences (DID) method, this paper first identifies the implementation conditions of "ESER" policy. Then we adopt three specifications to control the endogenous problem for the selection of demonstration cities. The robustness test verifies the reliability of our findings, and the spillover effect analysis reveals the deficiency of this policy. We reach the following conclusions: (1) Different from the previous studies, we find that the "ESER" policy can effectively reduce the pollutant emissions while ensuring a stable economic growth. (2) However, the event study reveals that the reduction effect is only existing in the demonstration period, which means that this policy is not sustainable. (3) Furthermore, we find no spillover effect of "ESER" policy on the non-policy targeted pollutant, suggesting that the local government only cares about the reduction of policy targeted pollutants. Based on these findings, we propose that the future energy saving and emissions reduction policy formulation should focus on the policy sustainability and overall environmental performance. (C) 2019 Elsevier Ltd. All rights reserved.