When city cluster becomes the engine of region economic development, haze, watershed management, pollutant emissions and other regional environmental problems continuously emerge. Unlike pollution control in a single city, there are neighborhood effects among the cities which are close to each other and have similar economic structure. If neighboring cities can integrate the environmental policy by providing the institutional regional public goods, the effect will be much greater than the total effect of single city’s environment policy. The effective supply of regional public goods as a long-term mechanism will promote the division of labor and cooperation of cities according to their factor endowment conditions, which is helpful to solve environment pollution of city cluster and realize the coordinated development and sustainable development of cities.