Can Marketization of Environmental Governance Improve Public Health?—Empirical Analysis Based on the Emission Trading System

To deal with the pollution issue caused by long-term economic development, China has introduced a number of environmental governance measures and made some progress. In the context of the strategy of developing a “Healthy China”, the Chinese government proposed to include health in the formulation and implementation of environmental regulation policies, which places a higher demand on the implementation effect of environmental policies. This study attempts to clarify the causal link between market-based environmental governance and public health, and quantify the implementation effects of market-oriented environmental governance, so as to provide accurate assessments for addressing environmental degradation and improving public health. Based on the CHNS database and provincial panel data from 2000 to 2015, this paper constructs a binary logit-based difference-in-difference model to investigate the effects of the emission trading system (ETS) pilot policy on public health measured by the incidence of respiratory diseases, heart disease, and other diseases. The results show that ETS significantly reduces the incidence of respiratory and other diseases but has no significant impact on the incidence of heart diseases. The improvement effects of ETS on public health mainly come from the reduction of SO(2) under the principle of total volume control. However, heterogeneity analysis reveals that the health-improving effects of ETS are not as expected. Although ETS can enhance the health of vulnerable populations, such as workers near pollution sources and rural residents, it has no discernible impact on the health of those far from pollution sources and urban residents.