Poverty alleviation and pollution reduction: Evidence from the poverty hat removal program in China

Economic development and industrialization are usually associated with severe environmental pollution. Differently, China’s poverty alleviation programs did not compromise its environment for the sake of economic development. China has lifted hundreds of poverty-stricken counties out of absolute poverty following the implementation of various poverty alleviation policies. We take a staggered difference-in-difference approach within a quasi-experiment to examine the effects of “poverty hat” removal on air pollution. Using panel data of poverty-stricken counties in China for the period 2013–2018, we identify the causal effects on PM2.5, PM10, and SO2 concentration reduction. Our results suggest that removing the poverty hat prompted the counties to reduce their air pollution. By studying the mining, photovoltaic, and tourism industries, we find that removing the poverty hat has improved air quality by increasing carbon sequestration and reducing resource depletion.