Towards cost-effective total pollution control in Chinese industries

Area of Science:

• Environmental Economics
• Environmental Policy
• Industrial Ecology

Background:

• The cost-effectiveness of command-and-control environmental policies is a long-standing debate.
• Regional Total Pollution Control (RTPC) policies involve mandatory emission reduction goals for specific provinces.

Purpose of the Study:

• To quantify the decline in cost-effectiveness due to RTPC policy implementation.
• To identify key factors influencing this cost-effectiveness decline.

Main Methods:

• Construction of province-level and technology-specific marginal abatement cost curves.
• Analysis focused on China's thermal power, iron and steel, and cement industries.

Main Results:

• Average cost-effectiveness decline was approximately 2.55% during the 13th Five Year Plan.
• The decline ranged from 1.44% to 3.63% depending on emission reduction allocation strategies.
• Key influencing factors included goal strictness, unit abatement cost (UAC) variance, and UAC-emission goal matching.

Conclusions:

• RTPC policy leads to a relatively minor decrease in cost-effectiveness compared to market-based approaches.
• The findings support the continued use of RTPC as a policy instrument for future environmental regulation design.