Impacts of high-speed rail on urban smog pollution in China: A spatial difference-in-difference approach

Abstract Smog pollution poses a severe threat to residents' health and economic development in China. High-speed rail (HSR) is a new and efficient infrastructure that is expected to provide economic and environmental benefits. Based on the STIRPAT model and the environment Kuznets curve (EKC) hypothesis, this study employs a spatial difference-in-difference approach using 284 prefecture-level cities' panel data from 2007 to 2016 to explore the impacts of HSR on urban smog pollution. The results demonstrate that urban smog pollution shows strong spatial correlations and that HSR can significantly reduce smog pollution. Causal mediation analysis is used to test two mechanisms related to HSR: sector structure upgrading, which can reduce smog pollution, and real estate market development, which tends to increase smog pollution. After controlling for the two opposite mechanisms, HSR is proven to have positive environmental benefits. Besides HSR, the impacts of per capita GDP and population on smog pollution are further discussed. The relationship between per capita GDP and urban smog pollution follows an N-shaped curve, and smog is proved to reduce to a certain extent as per capita GDP increases. The relationship between population and smog pollution shows a U-shaped curve, provided with a new interpretation relating to economies of scale. The findings have implications for policy-making, as they enrich the EKC hypothesis and provide evidence for the environmental benefits of HSR.