Do China's coal-to-gas policies improve regional environmental quality? A case of Beijing.

Clean energy transition has been considered as an indispensable way to attain sustainable development for China, where the coal-to-gas initiative plays a vital role towards the goal. This paper takes Beijing, China's political and economic center as well as a national pioneer in the energy transition, as a case to systematically analyze the co-mitigation of air pollution (PM2.5) and carbon emissions (CO2) achieved by the policy-driven natural gas-coal consumption substitution. Firstly, a qualitative analysis of the relationship of Beijing's coal-to-gas policies and its air quality has been conducted. Then, VAR and ARDL models are employed to quantitatively analyze the impacts of coal-to-gas policies on PM2.5 and CO2, respectively. Results show that (i) an innovation of natural gas/coal consumption ratio will reduce PM2.5 concentrations, and the effect decreases over time; and (ii) an increase of 1% in natural gas/coal consumption ratio in Beijing will cause a decrease of 0.0784% in CO2 emissions in the long run. Therefore, the coal-to-gas policies do increase the usage of natural gas and improve Beijing's air quality. The assessment methods and conclusions can be regarded as a reference for not only China's policymakers, but also other countries, especially nowadays when air quality is becoming more valued and GHGs are being tightly controlled.