Effect of urban agglomeration scale on industrial air pollution in China

While the economic benefits of urban agglomeration are well-documented, its environmental consequences remain theoretically underexplored. This study fills this gap by investigating how urban agglomeration scale affects air pollution through both local and external scale effects. Using panel data from 132 prefecture-level cities across seven major urban agglomerations in China from 2010 to 2020, we employ fixed-effects models to examine the impact of urban agglomeration on industrial SO₂ emission intensity. The results show that urban agglomeration scale expansion significantly reduces industrial SO₂ pollution: a 1% increase in local urban scale reduces emission intensity by approximately 1.096%, while a one-unit increase in external scale is associated with a 6.1% reduction. Furthermore, we uncover marked heterogeneity in these effects. Central cities benefit from a pronounced “local scale advantage” with stronger pollution reduction, whereas peripheral cities gain primarily from external scale spillovers. This asymmetry gives rise to a concentric spatial pattern of pollution, with lower levels in central areas that increase progressively outward. Notably, a “far-peripheral paradox” emerges: beyond a 300 km threshold, external scale spillovers turn from beneficial to detrimental, manifesting as “pollution agglomeration” rather than pollution reduction. Our theory-guided analysis clarifies the complex agglomeration-environment nexus and offers actionable policy implications for promoting coordinated development and implementing environmental fiscal transfer mechanisms that channel fiscal resources from central cities to far-peripheral areas bearing the burden of pollution agglomeration to ensure regional ecological balance.