Does energy transition improve air quality? Evidence derived from China's Winter Clean Heating Pilot (WCHP) project

Abstract Coal used for heating rural households poses a severe threat to ambient air pollution and human health. In 2017, China implemented the Winter Clean Heating Pilot (WCHP) project, which was designed to convert energy from “coal-to-gas/electricity”. However, the impact of the WCHP project and its associated dynamic changes have not yet been well quantified. Based on daily monitored panel data covering 35 pilot cities, we conducted a difference-in-differences (DID) model to identify whether or not the WCHP project is effective in maintaining air quality. Results showed that AQI, PM2.5, NOx, and SO2 emissions decreased by 20.4%, 18.59%, 34.1%, and 68.4%, respectively, and, except for SO2, these pollutant reductions were greater in Western China than in Eastern China. Furthermore, when certain variables were controlled, such as weather, holidays, GDP, the ratio between secondary industries, income levels, and environmental expenditures, these results were also robust. Parallel trends and placebo tests were additionally used to confirm the reliability of the DID model. The implementation of energy transition could gain the synergy between emission reduction and air quality improvement. Policy recommendations were finally made on rural-scale energy transition, including reforming the cost of electricity/gas through advanced technology and subsidies to account for regional inequality.