Navigating Cleaner Waters: Waste Import and Water Pollution

This paper examines the causal impacts of reducing solid waste imports on water quality in China, which was the world's largest importer of waste until recently. We focus on the National Sword policy, introduced at the end of 2017, which abruptly banned the import of plastics, textiles, vanadium slag, and paper, reducing waste imports from 1.25 million tons per month to nearly zero. Using administrative data on waste imports and daily water quality readings from real-time automated monitoring stations across China, we exploit the sudden reduction in imported waste to identify significant improvements in dissolved oxygen levels in prefectures that previously imported the banned waste. These positive effects vary by the type of waste imported and are smaller in prefectures where the main importers are multinational firms. Our results are supported both by the Regression Discontinuity Design and the Difference-in-Differences framework. The magnitude of the effect is strongest immediately after the ban and gradually declines over time.