Environmental emergencies and economic growth: evidence from China

Environmental emergencies have a negative impact on people's health and environmental protection, which is one of the important obstacles to sustained economic growth and harmonious coexistence between humans and nature. Based on the data from 31 regions in China from 2011 to 2020, this paper studies the impact of environmental emergencies on economic growth. The empirical results show that environmental emergencies have an inhibitory effect on economic growth. This paper examines the channels of this inhibition and finds that environmental emergencies can inhibit economic growth by improving the government's environmental protection policies and reducing the short-term credit supply of financial institutions. In addition, we find the industrial heterogeneity and regional heterogeneity of the impact of environmental emergencies on economic growth. From the perspective of industrial heterogeneity, the inhibition of environmental emergencies mainly affects the secondary and tertiary industries; from the perspective of regional heterogeneity, the inhibition of environmental emergencies mainly exists in China's relatively developed eastern regions. This study might help understand the economic impact of environmental emergencies to urge the government and the public to take measures to curb the occurrence of environmental emergencies and reduce the adverse impact of environmental emergencies on economic growth.