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Can China’s Industrial SO 2 Emissions Trading Pilot Scheme Reduce Pollution Abatement Costs?

Author

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  • Zhengge Tu

    (School of Economics and Business Management, Central China Normal University, 152 Luoyu Road, Wuhan 430079, China
    These authors contributed equally to this work.)

  • Renjun Shen

    (School of Economics and Business Management, Central China Normal University, 152 Luoyu Road, Wuhan 430079, China
    These authors contributed equally to this work.)

Abstract

This paper evaluates the effects of China’s industrial SO 2 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.

Suggested Citation

  • Zhengge Tu & Renjun Shen, 2014. "Can China’s Industrial SO 2 Emissions Trading Pilot Scheme Reduce Pollution Abatement Costs?," Sustainability, MDPI, vol. 6(11), pages 1-25, October.
    • Handle: RePEc:gam:jsusta:v:6:y:2014:i:11:p:7621-7645:d:41839
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    7. Yongrok Choi & Ning Zhang, 2015. "Introduction to the Special Issue on “the Sustainable Asia Conference 2014”," Sustainability, MDPI, vol. 7(2), pages 1-8, February.
    8. Thomas Stoerk, 2017. "Compliance, Efficiency and Instrument Choice: Evidence from air pollution control in China," GRI Working Papers 273, Grantham Research Institute on Climate Change and the Environment.
    9. Fei Wang & Changjian Wang & Yongxian Su & Lixia Jin & Yang Wang & Xinlin Zhang, 2017. "Decomposition Analysis of Carbon Emission Factors from Energy Consumption in Guangdong Province from 1990 to 2014," Sustainability, MDPI, vol. 9(2), pages 1-15, February.
    10. Ke Li & Malin Song, 2016. "Green Development Performance in China: A Metafrontier Non-Radial Approach," Sustainability, MDPI, vol. 8(3), pages 1-21, March.
    11. Wang, Yuze & Eriksson, Tor & Luo, Nengsheng, 2023. "The health impacts of two policies regulating SO2 air pollution: Evidence from China," China Economic Review, Elsevier, vol. 78(C).
    12. Shengxian Ge & Xianyu Yu & Dequn Zhou & Xiuzhi Sang, 2019. "The Integrated Effect of Carbon Emissions Trading and Pollution Rights Trading for Power Enterprises—A Case Study of Chongqing," Sustainability, MDPI, vol. 11(11), pages 1-17, June.
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