Financial Pressure And Smog Pollution

Under the new normal,China's economic development is undergoing profound changes,and the pursuit of green ecology has become the focus of attention from all walks of life.Smog pollution is a prominent problem to solve the bottleneck of the ecological environment,existing studies have mainly explained the causes of smog pollution from the perspective of environmental economics.How to standardize the behavior of local governments and reveal the causes of smog pollution from the perspective of finance not only helps to reveal the governance path of smog pollution,but also helps to enrich the cross-research of finance and environmental economics.This paper takes the cancellation of agricultural tax policy as the research background,Based on the abolition of agricultural tax reform nationwide in 2005,with the local revenue decline,this paper reveals the impact of local financial pressure on urban smog pollution by continuous DID method.We find that local fiscal pressures significantly rose after canceling the agricultural taxes,which in turn worsened urban air quality.Where fiscal revenues are more affected by the reform,the smog pollution is more serious.The effect of local financial pressure on air pollution remains robustness by testing common trends,measurements,sensitivities and other policy shocks.The results of heterogeneity analysis show that regional differences,whether it belongs to a large agricultural province or not,and urban types are all important factors affecting the relationship between financial pressure and smog pollution.The mechanism analysis shows that in order to reduce the impact of the reduction of agricultural tax revenue,local governments have the motivation to expand the scale of industrial investment,while reducing environmental regulations to ensure the stability of tax sources,but at the expense of air quality.From the perspective of environmental regulation,the policy of "two-control zones" helps to restrain the adverse impact of local financial pressure on air pollution.The conclusion of this paper provides direct evidence for local financial construction and environmental governance,such as promoting the construction of local tax sources,promoting the transfer payment effect evaluation,changing the official assessment system,standardizing the environmental regulation system,etc.