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Environmental co-benefits of climate mitigation: Evidence from clean development mechanism projects in China

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  • Wan, Panbing
  • Zhang, ZhongXiang
  • Chen, Lin

Abstract

The carbon reduction effects of climate mitigation have received much attention, but less attention has been paid to the co-benefits of climate mitigation such as such as air pollution reduction and related health impacts. This oversight may have led to an underestimation of the broader welfare effects of climate mitigation and thus hindering its progress in implementation. This paper investigates the co-benefits of climate mitigation through focusing on the pollution reduction effects of the implementation of the clean development mechanism (CDM), which is an important climate mitigation mechanism to enhance north-south climate cooperation. Using a unique firm-level dataset with data on China's CDM projects from 1998 to 2012, we show that the CDM implementation reduced sulfur dioxide emissions. Mechanism analyses show that the CDM implementation alleviated firms' financing constraints and promoted fossil energy savings, thereby reducing emissions of air pollutants that usually coexist with greenhouse gases in burning fossil fuels. We also find that the CDM didn't bring about the expected technological progress. These results highlight environmental co-benefits of climate mitigation and provide important implications for international climate cooperation

Suggested Citation

  • Wan, Panbing & Zhang, ZhongXiang & Chen, Lin, 2024. "Environmental co-benefits of climate mitigation: Evidence from clean development mechanism projects in China," China Economic Review, Elsevier, vol. 85(C).
    • Handle: RePEc:eee:chieco:v:85:y:2024:i:c:s1043951x24000713
    DOI: 10.1016/j.chieco.2024.102182
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    More about this item

    Keywords

    Climate mitigation; Clean development mechanism; Co-benefits; International climate cooperation; Technological progress;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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