Will Policy Uncertainty Deteriorate Haze Pollution? A Spatial Spillover Perspective

Haze has been a severe problem in China for some time, jeopardizing air quality, public health and sustainable growth. This paper examines the direct effect and spatial spillover effect of policy uncertainty on haze pollution with a spatial panel model, using prefecture-level data from 2004 to 2016. This study shows that: (1) policy uncertainty has increased the level of local haze pollution and has a significant spatial spillover effect on surrounding areas; (2) although local policy uncertainty has increased the haze pollution in geographically adjacent cities, it only affects the cities within the province with similar economic distances; and (3) the policy at the central level can effectively alleviate the impact of policy uncertainty at the local level on haze pollution, especially in relation to the spatial spillover effect, but still has limitations in eliminating the direct effect, which is due to the ineradicable nature of policy uncertainty.