Association for Public Policy Analysis & Management

To improve the air quality in winter, clean heating policy was implemented in “2+26” pilot cities of China in 2016, which mainly included replacing coal by gas or electricity, and reducing the loose coal combustion. Using a difference-in-differences framework, we estimate the impact of clean heating policy and its financial subsidy on air quality. We find this policy decreases the daily air quality index, PM_2.5 and PM₁₀ by 6%, 5% and 9%, respectively. The number of days with excellent air quality increases by 1.4 days per month after implementing the policy. We also estimate that the subsidy elasticity of air quality index is -0.18. The consumption growth of clean coal does not lead to the deterioration of air quality. There is suggestive evidence revealing that the advanced coal-fired boilers for centralized heating will be helpful for air quality improvements. It is more in line with China’s coal-rich and gas-short resource endowment.