Winter Heating or Clean Air

This paper assesses the role of heating entitlements in generating stark air quality differences
across China. During the 1950-1980 central planning period, the Chinese government established
free winter heating of homes and offices as a basic right via the provision of free coal fuel for
boilers. The combustion of coal in boilers is associated with the release of air pollutants,
especially total suspended particulates (TSP). Due to budgetary limitations, however, this heating
entitlement was only extended to areas to the north of the line formed by the Huai River and
Qinling Mountains in central China. We find this procrustean policy led to dramatically higher
TSP levels in the north; the difference is roughly 5-8 times current TSP concentrations in the US.
This result holds both in a cross-sectional regression discontinuity-style estimation approach and
in a panel data setting that compares the marginal effect of winter temperature on TSP in northern
and southern China. In contrast, we fail to find evidence that the heating policy has a meaningful
impact on sulfur dioxide (SO2) and nitrogen oxide (NOx) concentrations.

Douglas Almond
Yuyu Chen
Michael Greenstone
Hongbin Li