Can firms achieve the collaborative governance of airborne pollution and greenhouse gases? Evidence from the Chinese industrial sector

Abstract

The rapid global industrialization and urbanization processes, especially in developing countries, have caused serious environmental pollution and climate warming. The industrial sector, in which high energy consumption is its main feature, is an important source of airborne pollution and greenhouse gases. The effective realization of collaborative emission reduction in the industrial sector has become an important path worldwide to reduce pollution and carbon in the future. Based on matched data on industrial firms, this study uses a fixed effects model, the two-stage least squares method, quantile regression and an interaction regression model to explore the co-benefits of airborne pollution and greenhouse gas emission reduction from a microscale perspective. Benchmark analysis demonstrates that for every 1% decrease in the airborne pollution emissions of firms, the greenhouse gas emissions of firms decrease by approximately 0.014%. According to heterogeneity analysis, the electric power, heat production and supply industry; the coal mining and washing industry; the leather, fur, feather and related products industry; the ferrous metal ore mining and dressing industry; and the petroleum, coal and other fuel processing industry are ripe for reduction at lower costs. Furthermore, feasibility analysis reveals that firms' sulfur reduction behavior and the government's sulfur reduction legislation may result in collaborative greenhouse gas emission reductions while regulating airborne pollution. This research can help countries meet multiple emission reduction goals by facilitating the optimization of joint emission reduction methods that target numerous pollutants.