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AbstractHigh coal consumption resulting from rapid economic growth in China has taken a high toll on Chinese residents' health and China's economy. Many citizens suffer from high rates of air pollution-induced respiratory and cardiovascular illness and premature death. Since the late 1970s, China has been mandating and updating its air pollution reduction policies, many of them targeting emissions from coal burning. These environmental regulations are embedded within a regulatory system with many features of China's former system of central planning. In this system, national regulations, negotiated political agreements, and five-year plans form the basis for the implementation and enforcement of environmental policy. But regulations are often weakly enforced due to poor policy design in which polluters face fines cheaper than compliance costs, and misaligned incentives for government agencies to enforce regulations.