The Influence of Government’s Expenditure in the Environmental Protection on Air Pollution in Taiwan

Abstract

This study explores the influence of government’s spending on environmental protection on air pollution in Taiwan. Using the panel data of 20 counties, county-level cities, and municipalities in Taiwan covering the period from 2013 to 2018 and the spatial econometric analysis due to considering the possible spatial dependence of air pollution represented by PM2.5 concentration and SO2 emissions, the primary finding is that government’s spending in the environmental protection can statistically significantly improve air pollution regardless of where the financial source is. However, rather than the local fiscal expenditure on environmental protection, subsidies of the air pollution control from the central government can play more important roles to effectively improve air quality of the local area in Taiwan.