Is Natural Gas Consumption Mitigating Air Pollution? Fresh Evidence from National and Regional Analysis in China

As China has called for the mitigation of fine particulate matter such as PM_2.5 emissions, developing the natural gas industry is considered as an effective way to reach this mitigation goal. The positive impact of natural gas on inhibiting PM_2.5 emissions is well documented, but the regional difference in this field is scant. Therefore, this study assesses the impact of natural gas consumption on PM_2.5 emissions and examines the environmental Kuznets curve (EKC) relationship between economic growth and PM_2.5 emissions, based on the panel data of 30 provinces in China from 1998 to 2016. Furthermore, the regional difference is analyzed from the perspective of economic development and natural gas development. The estimation results report two inverse relationships between PM_2.5 emissions and natural gas consumption in the case of China. Specifically, at the national level, PM_2.5 emissions has risen by 0.023% with natural gas consumption demonstrating 1% growth, which indicates that natural gas consumption in China will exacerbate PM_2.5 emissions. However, the use of natural gas has an additional effect on PM_2.5 emissions in the regions with high levels of natural gas consumption. For the high consumption region of natural gas, a 1% increment of natural gas usage inhibits the release of PM_2.5 by 0.017%. The result implies that the mitigation effects on PM_2.5 emissions only arise in the areas where natural gas is largely used. Furthermore, the validity of EKC pattens between economic growth and PM_2.5 emissions is confirmed across China, and the EKC has reached its peak. Varied causality links among PM_2.5 emissions, economic development, and natural gas consumption have been distinguished according to the causality flow. Finally, two efficient policy implications are proposed to address PM_2.5 emissions and accelerate the growth of the natural gas industry in China.