Clear Waters, Flourishing Growth: Decoupling Water Pollution From Economic Growth in Shanxi Province, China

Achieving decoupling between water pollution and economic growth is a critical governance challenge in resource-based economies (RBEs). The classic environmental Kuznets curve (EKC) hypothesis often fails in such regions due to "policy trade-offs," such as the conflict between energy security and environmental protection goals. Simultaneously, existing methodologies tend to bifurcate the analysis of long-term structures and short-term shocks. This paper, using data from China's Shanxi Province (2010-2024) as a typical case, constructs a "multi-scalar diagnostic framework" that integrates principal component analysis (PCA), the EKC, and the Tapio decoupling model. Empirical results show the following: (1) During the study period, the relationship between water pollution and economic growth in Shanxi was predominantly in a state of weak decoupling. However, the Tapio model also revealed recent "expansive negative decoupling" events, indicating that short-term pressures persist. (2) The EKC analysis reveals a "differentiated path": industrial pollution indicators, including industrial wastewater, COD, and ammonia nitrogen, exhibit an inverted U-shape, suggesting industrial governance is aligning with economic growth. (3) In contrast, the EKC curve for domestic ammonia nitrogen shows a distinct N-shape, indicating that pressure from domestic wastewater discharge continues unabated. (4) Notably, this N-shaped curve appears to have passed its second turning point, with domestic ammonia nitrogen emissions showing a downward trend after peaking. This study's theoretical contribution is the revelation that the N-shaped curve is the cumulative consequence of "policy trade-offs" in RBEs. These short-term policy shocks, captured by the Tapio model, constitute the micro-foundations for the distortion of the long-term (N-shaped) EKC structure, reflecting a governance model that prioritizes industrial and energy objectives while relatively neglecting municipal environmental governance.