Can China’s Industrial SO2 Emissions Trading Pilot Scheme Reduce Pollution Abatement Costs?

Abstract

This paper evaluates the effects of China's industrial SO2 emissions trading pilot scheme (SETPS) on the pollution abatement costs (PAC) from the past and future perspective. We apply the kernel-based propensity score difference-in-difference method to examine the effects of SETPS on the average pollution abatement costs (APAC) and the marginal pollution abatement costs (MPAC) based on the environment data from the industrial sector of 29 provinces in China over the period of 1998 to 2011. Our findings are that SETPS failed to reduce PAC as a whole. During 2002 to 2011, SETPS increased APAC by 1310 RMB per ton on average and had an insignificant negative effect on MPAC. Nevertheless, the conclusions would be markedly different if we separately investigated the effects of SETPS each year of the pilot period. The positive effects of SETPS on PAC started to appear since 2009, and SETPS significantly reduced both APAC and MPAC, especially in 2009 and 2011.

Introduction to the Special Issue on “the Sustainable Asia Conference 2014”

“…For the feasibility of this project, the empirical test evaluates the effects of SETPS on pollution abatement costs (PAC) from the past and future perspectives in a total of 29 Chinese provinces (including all of the pilot 'provinces') over the period 1998-2011. Results showed even if SETPS failed to reduce PAC as a whole, PAC reduction efforts had become increasingly important since 2009, implying that Chinese government involvement could improve the system to correct any design and operational deficiencies in the present emissions trading pilot policies [11]. As a global factory, China is considered to be a black hole for global resources as well.…”

“…Recognizing the need for action, the Chinese government introduced the SO2 Emissions Trading Pilot Scheme (SETPS) in 2002 to reduce industrial SO2 emissions. Four provinces (including Shandong), three municipalities (including Shanghai), and one business entity (the China Huaneng Group) were selected as pilot participants [11]. For the feasibility of this project, the empirical test evaluates the effects of SETPS on pollution abatement costs (PAC) from the past and future perspectives in a total of 29 Chinese provinces (including all of the pilot 'provinces') over the period 1998-2011.…”

Green Development Performance in China: A Metafrontier Non-Radial Approach

“…Nevertheless, the existing literature aiming at evaluating green development performance focuses primarily on CO 2 emissions or SO 2 emissions [25], and rarely considers other environmental pollutants. Therefore, they may not give an overall prospect of green development.…”

Study on an Implementation Scheme of Synergistic Emission Reduction of CO2 and Air Pollutants in China’s Steel Industry

“…and CO 2 under the influence of the air pollution control policies or CO 2 emission reduction technologies. Compared to the spatial analysis perspective, more studies focused on the industry or sector level, such as the power sector, transportation sector, and cement industry [13,[33][34][35][36][37][38]. However, most of the above studies analyze the long-term synergistic effects of a single policy.…”